News

Scannell: Cronin Had MTVN Trade Secrets

1/18/1998 7:00 PM Eastern

New York -- Nickelodeon president Herb Scannell testifiedlast week about his concerns that the ex-Nick at Nite/TV Land executive Rich Cronin coulduse his full access to key confidential MTVN documents so Fox Family Channel could'counter our actions.'

The testimony came during MTV Networks' bid to blockCronin from joining Fox Family as CEO before July 11.

But Cronin's attorney, Margaret Blair Soyster, pressedScannell to finally concede, 'I'm not accusing him' of sharing those tradesecrets with outsiders. She also pointed out that Cronin could have taken that sameinsider information to 'the biggest competitor' on July 1 this year, the dayafter his MTV contract was to expire, without fear of the legal action that's put hiscareer on hold.

'He saw all our plans,' Scannell said of Cronin.He had 'full access to our programming, scheduling and marketing,' which couldenable him to bolster not only Fox Family, but FX and Fox News Channel, by undercuttingMTV Networks' pricing, he added.

Specifically, Scannell said secrets to which Cronin wasprivy included Nickelodeon's 1998 budget presentation, profit-and-loss projections,ad sales growth estimates and specifics on future programming. In addition, he saw 'astrategic review requested by Viacom' that spelled out rivals' strengths andweaknesses and 'what we might do ... to fortify Nickelodeon' against Fox. Healso saw an affiliate update among the top MSOs, which Scannell said could be used by Foxto target 'switch-outs' in problem areas.

Scannell was an uncooperative witness as Soyster tried toindicate that new ideas and strategies were developed for MTVN's networks in the pastthree months. Those were 'not dramatic changes,' he contended.

Scannell conceded that none of those sensitive documentswas marked 'confidential.' Moreover, Soyster pointed out that the former TV Landand Nick at Nite chief had access for years before signing his first MTVN contract, inApril 1996.

Scannell said he had planned to renew Cronin'scontract, with a bonus, but later, under prodding from Soyster, conceded he had notdiscussed renewal or promotion with him prior to Fox's lucrative job offer. Scannelldismissed Soyster's claim that Cronin was 'frustrated ... by the dual reportingstructure' by observing, 'My interpretation was Rich liked his job.'

When Soyster, in her cross-examination, sought to getScannell to indicate he had no knowledge that Cronin had given his inside information tooutsiders -- presumably Fox -- Scannell wouldn't go along. 'I don't knowwhat he showed or what he didn't,' he said repeatedly.

Asked if he'd heard Cronin threaten disclosure, hesaid, 'Not that I'm aware of.' Cronin's access to that information'concerns me a great deal,' he said, adding, 'I don't know whathe's sharing with them.'

Soyster also got Scannell to agree that there is no writtenpolicy at MTVN that bars executives from taking such documents home and that he'dnever warned Cronin against doing so. Having the papers at home didn't necessarilymean he shared them with others, Cronin's attorney stressed -- to which Scannellanswered, 'I can't say yes or no.' But, when pressed further, he added,'I'm not accusing him.'

Cronin's attorney tried to show Cronin was not theonly key Nickelodeon executive, first by citing press releases and other internaldocuments describing Larry Jones, part of Cronin's 'replacement team,' as'one of the original architects of TV Land.'

But when Soyster tried to admit an internal'Q&A' that said, 'Nickelodeon is bigger than any one person, as hasbeen proven since [former Nick president] Gerry Laybourne's departure,' Scannellsaid he couldn't recall having seen it, so Judge Herman Cahn disallowed it.

Soyster described Scannell as 'the senior guy'and 'the public face' at Nickelodeon, but when she sought to admitScannell's contract -- with a Dec. 31, 1998, expiration -- as 'pertinent,'the judge disagreed.

She also said Cronin was contractually entitled to 10 dayswritten notice of his termination, but the judge, unimpressed, dismissed that tack.Scannell said, 'I think he was given such clear signals.'

And when Soyster wanted to admit as evidence the now-famousSumner Redstone description of Cronin as 'a low- to middle-level executive,' thejudge vetoed it -- but not before Scannell said he disagreed with the Viacom Inc.chairman's assessment and saw Cronin instead as 'a talented executive.'

At the Fox Family upfront, Fox Kids Worldwide chairman HaimSaban said he is sticking with Cronin as his choice for top executive. 'He [Cronin]will be the CEO [of Fox Family], period,' Saban said under press questioning .

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