Steinbrenner sued over YES idea

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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.

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  • 27 this year

    since you’re a law student Ben, can you explain to me how an oral agreement could really be held? Isn’t it not a physical binding contract? How exactly does that work?

    • http://www.secondavenuesagas.com Benjamin Kabak

      I will, but I want to wait until I see the filing. Unfortunately, PACER and Justia won’t have it until Monday. I can’t find it anywhere else. Once it’s available, I’ll see what I can do for analysis.

    • Tom Swift

      No contract is “physically” binding.

      • 27 this year

        that isn’t what I meant. I meant as in a physical document type thing. Oral agreements are not always hard and fast as far as I know.

  • http://twitter.com/Hopjake Jake H

    Seems to me that this is a long time in the making. Why sue after so long if he had this “idea”

  • Brandon

    From the sounds of it, its all hear say. Gutowski will say that a promise was made, Steinbrenner will say that none was made. Also if there was no written agreement about the R.S.N thing, there seems to be not enough evidence to even file a lawsuit. I wouldnt be surprised if the courts shoot this down, since I do not see any presentable evidence to serve as a basis for the lawsuit, other then hearsay. IMO, this may just be someone looking to make a quick dime.

    • Andy In Sunny Daytona

      …a quick 230,000,000 dimes.

  • Pasqua

    So I says to Kabak a couple of years back, “Hey, Kabak! You know what people like? That internet thing is what people like. You know what else people like? The Yankees. Why don’t you start one of them blogs and write about the Yankees. It could be huge!”

    Long story short…expect to hear from my attorneys.

    • Andy In Sunny Daytona

      You know what would be awesome, a cologne that smelled like you just got back from the beach…

  • bicycle boy

    WHAT A CYNICAL IDEA — WAITING UNTIL GEORGE IS UNHEALTHY TO BRING THIS UP. WHAT A COWARD!

  • crawdaddie

    The timing of this lawsuit stinks to the high heavens.

  • Dela G

    back in 1920, i was talking to babe ruth about opening this stadium at the subway stop of 161st and River, but i never got my damn royalties

  • Manimal

    This guy has GOT to be a mets fan.

  • Januz

    What I find very interesting, is he is suing George PERSONALLY, not Hank, Hal, Randy Levine, or the Yes Network (If there was some validity to the claim he would have sued Yes, and asked for part of the profits). What I see is a vulture, who wants to take advantage of an old man with deminished capacities (Sort of like what happened to Brooke Astor). Which is a reason why he does not go after guys who can defend themselves to the fullest extent of the law,
    Finally, Gutowski needs more than an “Oral Contract” to win the case, because an obvious question that a judge would ask is “Why did you wait so long before suing? Saying that “They were negotiating for years” does not cut it.

    • Whitey14

      It sounds like what he is claiming is George Steibrenner stole his idea, why would he sue anybody else and why would he sue the network, which obviously wasn’t even created at the time he claims to have been discussing it.

      • Januz

        There was a famous case where Sears stole a guy’s idea for a ratchet grip tool. The Supreme Court decided that amonst other remidies, that he was entitled to ROYALTIES for it. If Gutowski was really injured by Steinbrenner, he should be entitled to some percentage of the Yes Network, and lost royalties down through the years (That number plus interest and legal fees could almost make the Yankees give Gutowski FULL ownership of Yes). However, he would have a huge hurdle to climb to win such an argument. Which is why he is trying for an easier target (A man with diminished mental capacities is an obvious example. But in addition, Gutowski knows that Richard Brodsky is just waiting for ANY Yankee dirt to come out in court so he could bring a hammer down, so he hopes they simply settle with them).

  • Tony

    As far as I know, oral contracts are binding but still have to proven to exist if taken to court. As you might imagine, that’s not always easy to do.

  • Kevin M..

    While I’d obviously like to see more details, as a lawyer this case seems like a joke to me. Oral contracts for employment of over a year are not enforceable, and the contact seems to lack consideration on the plaintiff’s part. Doesn’t seem like any detrimental reliance for a promissory estoppel theory.

    Also, the concept that someone can own the idea for a regional sports network is ludicrous. I think we’ll see this case get thrown out on a motion to dismiss in the next few months.

  • MikeD

    I’m not a lawyer, and I don’t play one on the Internet, but this seems like a tough one to prove, especially when the guy he’s suing can barely speak. On top of that, this supposedly goes back over a decade, during which time they’ve done work together. Without something in writing…

  • Renny Baseball

    Case will be thrown out in court before trial. I understand what plaintiff is saying — that his idea was allegedly stolen, that an oral agreement was breached — but he has to establish precisely what the terms of the oral agreement were and that both sides of the supposed contract reached a “meeting of the minds” to even set up a breach of contract claim. Without a written contract, that can be close to impossible. Also, in negotiations, just because the Yankees used hard-nosed tactics and cut him out of the RSN deal, which he would have a hard time proving originated solely as his idea, does not give him the right to sue. He should have covered his tracks more carefully if there was anything of value that he added to the creation of the network in the first place. I agree with other postings about his choice of defendant too. And, on top of all of this, wouldn’t there be a statute of limitations problem given the long wait to sue?

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  • beware of michael kay

    Rule 56 that shit

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