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Mike Reynolds
Turner Broadcasting System Inc.'s push to return to its roots this fall via a regional entertainment network has hit a legal hurdle over professional sports.
Fox Sports Net South is seeking to enjoin TBS and parent company Time Warner from launching Turner South, a 24-hour channel seeking distribution in six Southeastern states, over what it argues is a non-compete clause signed Oct. 10, 1996, when Fox/Liberty Media bought Turner's 44% stake in SportsSouth for some $65 million.
Filed June 15 in a state court in Fulton County, Ga., the Fox suit argues that in planning to show games of the Atlanta Braves, Atlanta Hawks and Atlanta Thrashers, TBS and Time Warner are violating a non-compete agreement by putting Turner South in direct competition with the regional sport network, which also gained long-term rights extensions with MLB's Braves and the NBA's Hawks at the time Turner's stake was acquired.
Turner South's sports scorecard calls for it to air between 30-35 Braves games, 12-15 Hawks contests and 46 match-ups of the Thrashers, the NHL expansionist franchise, also owned by Turner, which faces off its first season this fall.
According to a copy of the complaint, Fox claims that TBS and Time Warner entered into a non-compete agreement under which "Turner and Time Warner agreed that neither they, nor any of their affiliates, would compete with SportsSouth, directly or indirectly, by, among other things, engaging in the organization, ownership or operation of a regional cable television sports network offered primarily to viewers in the SportsSouth region. This non-compete agreement was an essential part of the consideration for Fox/Liberty's purchase of Turner's interests in SportsSouth."
Announced in February, Turner South plans to offer sports, and the channel plans to draw from Turner and Time Warner's vast library holdings and serve up a mix of movies, sitcoms, and other entertainment fare. There will also be a smattering of original programming reflecting Southern seasoning and sensibilities, notably a weekly series based on Southern Living magazine; a weekly music show from Nashville's legendary Bluebird Cafe; and WCW Classics, which will draw from the best matches of the Turner-owned wrestling circuit; and CNN regional news, financial updates and weather reports.
In a statement, Fox fired this shot: "Despite Turner's insistence that this new channel contains more than regional sports programming, the reality is that the network could not be successfully launched without these local sports properties. Fox Sports Net South has repeatedly expressed its surprise at Turner's effort to use regional sports rights as the foundation for this new regional channel ..."
For their part, TBS Inc. and Time Warner issued this prepared statement: "In response to the complaint filed today against Turner Broadcasting System Inc. and Time Warner by Fox Sports Net South, we have complied with all of our contractual obligations to Fox. We believe the lawsuit regarding Turner South is entirely without merit."
Both Turner and Fox officials declined further comment.
Sources say that the parties have been trying, but failed to bridge their legal loggerheads. "This is not surprising. The only surprise is that it has taken this long,' said one member of the sports marketing community. "Turner South may have lots of other programming, but it's going to gain carriage and a significant portion of its ad sales through pro sports."
Turner South, headed by TBS Superstation president Bill Burke, is seeking analog positioning on basic tiers, and is available to cable affiliates and satellite providers. At some point, the network, which has yet to announce any distribution deals, could see its universe encompass 6 million homes in Georgia, Mississippi, Alabama, Tennessee, South Carolina and parts of North Carolina.
Not surprisingly, most industry watchers expect that Turner South will gain residency on parent company Time Warner Cable's Southern systems, representing some 680,000 subscribers.
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