SBJ/20100215/This Week's News

LPGA, IMG file counterclaim over unpaid rights fees

The LPGA and IMG filed a counterclaim this month in a civil action with Seoul Broadcasting System over the company’s refusal to make a payment in its final year as the tour’s Korean television rights holder.

The counterclaim follows a lawsuit filed last August by SBS, the LPGA’s exclusive Korean rights holder from 1995 to 2009, against the LPGA and IMG after they awarded the Korean rights to J Golf beginning in 2010. IMG brokers the tour’s international television rights.

At the root of the lawsuit is a claim by SBS that it had verbal assurance from the LPGA that it could match any final offer for the rights. In its motion to dismiss, the LPGA and IMG deny there was any such agreement.

The LPGA and IMG declined to comment.

According to court papers, SBS says the LPGA asked for $4.5 million under terms of a five-year extension that would have begun in 2010. SBS, which paid $2.25 million a year for the rights, was informed by LPGA Commissioner Carolyn Bivens that its $3 million counteroffer was below what she considered market value.

On Jan. 30, 2009, three days before a scheduled meeting between Bivens and SBS President Sang Chun to discuss an extension, the tour informed SBS that it had reached a tentative agreement with J Golf, according to court papers. SBS countered by offering to pay 5 percent on top of the offer from J Golf.

Seven days later, J Golf was introduced as the tour’s new Korean rights partner under a five-year deal worth $4.5 million annually from 2010 to 2014. The announcement was made during an LPGA tournament in Hawaii that was sponsored by SBS.

The 10-count lawsuit filed by SBS, which is still in the discovery phase, seeks $1.125 million in restitution, as well as unspecified compensatory and punitive damages. It originally was filed last August in Bergen County Superior Court, but SBS removed the lawsuit and refiled it in December in U.S. District Court for the Middle District of Florida.

In a countersuit filed Feb. 4, the LPGA and IMG ask the court to require SBS to pay the second $1.125 million installment that it was contractually required to pay on July 15, 2009.

The legal action is one of two active multimillion-dollar lawsuits against the LPGA, which was sued for $5 million by Summit Properties over the manner in which Bivens terminated that company’s licensing contract in June 2006. That lawsuit was filed in 2007 and is still in pre-trial proceedings.

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