The NFL franchise is seeking to collect at least $1 million in fees it says the radio group owes for airing football games during the 2011 season. While Cumulus paid a rights fee to the Bills for the 2011 season, it did not yet to pay an “incentive rights fee,” according to the lawsuit filed in State Supreme Court. The lawsuit names both Cumulus and Citadel Broadcasting as defendants. RBR-TVBR spoke with Cumulus COO John Dickey.
The incentive rights fee equals half the broadcaster’s gross revenues from the sale of related programming or advertising in connection with any Bills game, after accounting for certain costs, according to the suit. The team also is seeking attorney’s fees, costs and interest. The suit alleges breach of contract and unjust enrichment, reported The Buffalo News.
Cumulus’ 97 Rock and 103.3 the Edge carried Bills games from 1998 through 2011.
Here’s the history:
Citadel Radio was the rights holder with the Buffalo Bills through 2011, the final year of a three-year deal for exclusive radio broadcast rights. Cumulus bought Citadel in 2011 and inherited a deal to carry the Bills. The contract was up for renewal this coming season. Negotiations were under way and we hear Cumulus got aggressive – which was totally their prerogative.
Cumulus then said in January that it was pulling out of the bidding for the Bills’ radio rights. The Bills then signed early this year with Entercom’s WGR-AM for the upcoming season. The Buffalo Bills Radio Network will also be heard on 21 other stations throughout New York State, including Entercom’s WCMF-FM and WROC-AM in Rochester.
Cumulus CEO Lew Dickey perhaps retaliated by stopping payment of the incentive rights fees. They were based on a variable component to the deal – revenue share. Citadel paid what it owed in incentive rights fees for the 2009 and 2010 football seasons, the lawsuit said.
Cumulus “received substantial monetary benefit” from last season’s broadcast rights, according to the suit: “For the 2011 NFL football season, the reasonable value of the exclusive radio broadcast rights and perquisites was believed to be at least $2.4 million, of which an amount believed to be at least $1 million remains due and owing.”
Also, the team said that it has not received an independent auditor’s report on gross revenue and net revenue covering the 2011 season, which the team said the defendants were required to provide, according to the lawsuit.
“It is inequitable for defendants to retain the benefit of the exclusive radio broadcast rights and all of the perquisites given to them by [the] Buffalo Bills without paying the fair value of said rights,” the team says in the lawsuit.|
Cumulus COO John Dickey tells RBR-TVBR: “We stepped into an existing agreement that we didn’t negotiate and we will honor terms of the agreement. Not sure why the Bills filed this suit.”
RBR-TVBR observation: What’s also interesting is we’ve heard Cumulus has intimated to some that they are going to get into the NFL business nationally and they just partnered with CBS Sports. It’s probably good they signed the deal with CBS when they did because winding up in a lawsuit with an NFL franchise could have been a deal killer.