By many accounts, the YES Network has been one of the greatest Yankee success stories of the last ten years (and I’m not just saying that because of our affiliation with them). The regional sports network has garnered high ratings for its games and has allowed the team to capture even more revenue. With in-market streaming deals now in place, the team and the network stand to gain even more, and some estimates value the YES Network at $3 billion.
Now, though, a former MSG head is claiming that George Steinbrenner and the Yankees stole the idea for a team-focused RSN from him, and after years of haggling with the team, Bob Gutkowski filed a $23 million lawsuit in federal court yesterday for fraud and breach of contract. While the court filing isn’t yet available online, Richard Sandomir has more:
Bob Gutkowski, who as president of the MSG Network negotiated a 12-year, $493.5 million deal in 1988 with the Yankees and is the plaintiff in the lawsuit, said that he had several meetings with Steinbrenner, starting in 1996, to discuss the idea of a Yankees network. He said he also made a presentation in 1998 to Steinbrenner and other Yankees executives that laid out how to build a regional sports network controlled by the team.
At one meeting in 1997, according to the lawsuit, Steinbrenner said he wanted to use the threat of starting a network to get $1 billion for a 10-year extension from MSG.
“At no point did Steinbrenner, regarded for his business acumen, conceive of creating a Yankees television network,” Gutkowski said in his papers. “The idea and plan was solely Mr. Gutkowski’s.” He added that Steinbrenner “knowingly and continuously misrepresented” an oral agreement that Gutkowski would run or be part of the network.
Interestingly, as Sandomir points out, Gutkowski has named Steinbrenner as the sole defendant in the case. According to Newsday’s Neil Best, Gutkowski claims that Steinbrenner made a personal promise to him regarding the network. It is doubtful that Steinbrenner will be able to testify in his behalf, and the Yankees may instead have to rely upon Lonn Trost and Randy Levine for statements in court.
The Yankees termed the suit “patently false and frivolous.” Said Howard Rubenstein, “Mr. Gutkowski had nothing to do with the initiation of the idea for an R.S.N. for the New York Yankees, nor did he have any role in the establishment or the success of the YES Network.”
In his court filings, Gutkowski alleges that Steinbrenner promised him the reins to the new RSN. While a consulting contract materialized for Gutkowski, he alleges that he did not get the position promised to him and that his suggestions were ignored.
Said the plaintiff in a statement, “I did everything possible to avoid having to sue George Steinbrenner. I have repeatedly spoken with his people and asked for a meeting directly with George. Unfortunately, their position was to stall me, string me along and, in the end, block the meeting. Their actions made it clear that the only way for me to be fairly compensated for the idea that I brought to George and the work that I performed was to sue him.”
For the legal eagles among us, I’ll try to get the filing posted as soon as it’s available. This is one case definitely worth watching.