Judge Nips Cronins Fox Plans Rules For MTV Networks in Breach-of-Contract Suit


New York -- The legal setback that a New York judge dealtRich Cronin and Fox Kids Worldwide Inc. last week left unanswered the burning question:When will Cronin start at Fox Family Channel and Fox Kids Network?

New York Supreme Court Judge Herman Cahn approved thepreliminary injunction sought by MTV Networks in stopping Cronin from taking his post aspresident and CEO of Fox Family. Cahn's evidentiary hearing on the Cronin case beganin late December, nearly two months after MTVN fired the former Nick at Nite senior vicepresident and president of Nick at Nite's TV Land for taking the job at Fox althoughhis MTVN contract doesn't expire until July 1.

But MTVN executives said they are now looking forward tothe trial, which could conceivably sideline Cronin well beyond Fox Family's scheduledAug. 15 premiere as the latest kidvid challenger to Nickelodeon, industry sources said.

A Fox Kids Worldwide spokesman refused to 'getinvolved in speculation' as to how long Fox might wait for Cronin, should that occur.

Both sides put their own spin on the judge's decision.MTVN, in its statement, said, 'We're pleased that the court has vindicated ourposition.' MTVN added that the judge agreed with its main contention -- that,'as the decision says,'Once Cronin entered into his employment agreement withFox Kids, he could no longer be trusted to perform his duties at MTVN.''

In his statement, Fox Kids chairman and CEO Haim Sabansaid, 'Our business plan always reflected the fact that Rich would be joining us inJuly, once his commitment to MTV Networks was satisfied.' But Saban's statementwas in sharp contrast to his testimony: 'This is a very dynamic industry, whereknow-how becomes stale very quickly. Rich Cronin is sitting on the sidelines with hisknow-how going stale,' Saban testified during the hearings.

In the Cronin-less interim, Saban said, 'A skilledmanagement team has been immersed in launch activity for Fox Family Channel under mydirection.'

The decision may not alter Fox's programming plansdramatically, since Saban is a veteran of the Hollywood community. The Family Channel,which becomes Fox Family Aug. 15, is in 75 million homes.

Cronin himself professed to be 'disappointed with thejudge's decision ... I was completely in the right to do what I did, according to thecontract, but the judge didn't see it that way.'

The order means that Cronin is not allowed to be in contactwith Fox or to do any business in the cable industry. 'They're laying out all ofthe specifics of it,' Cronin said from his new Los Angeles home. 'Now I have asabbatical ... I may even learn to surf.'

The next step is the trial, which will take up the questionof a permanent injunction and possible compensatory damages, a spokeswoman for MTVN said,but no date has been set. No settlement talks are in the works, both sides said.

Asked about talk of damages, Cronin said, 'Damages?I'm really surprised that they took it this far.'

But one ad-agency executive said, 'It's notinconceivable that Fox and Viacom [Inc.] will reach an amicable solution' before atrial is set. Saban 'has deep pockets if he wants him that bad, and apparently, hedoes,' the buyer said.

Linda Stuchell, vice president of programming and publicaffairs at Harron Communications Corp., said that if MTVN sidelined Cronin further,'that would be unfortunate. I don't know the benefit from that, but I tend notto be a litigious person.'

Various other MSO programming executives were unreachableor unwilling to discuss the decision's impact on Fox Family, but several ad-agencyexecutives were more outspoken.

'I'm sure it'll slow them [Fox] down,'said Bill Croasdale, president of Western International Media's national broadcastdivision, about the decision.

Jon Mandel, senior vice president at Grey Advertising,doubted that Cronin would be blocked indefinitely from Fox. 'I don't see howthere's a permanent injunction,' he said.

He added, 'A bigger issue, a far scarier issue [thanthe decision's impact on Fox], is: How do any of us ever change jobs? Who owns ourbrains? Who owns our experience?'

'Maintaining the preliminary injunction through June30, 1998, is reasonable,' ruled Cahn, 'because that is the time period for whichthe parties contracted, it is ... [when] the upfronts take place, and that will allow MTVNto recover from Cronin's unexpected early departure and prevent Cronin from assistinga competitor during the term of his contract.'

In his decision, Cahn said that once Cronin signed with FoxKids, 'this created a problem of divided loyalties, since it was in Cronin'sinterest to see Fox Kids succeed in order to increase the value of his stockoptions,' which were part of his Fox job offer. 'The fact that Cronin has afuture interest in the Fox Kids stock options breaches ... his MTVN contract,' hesaid.

Given the terms of his Fox contract -- paying Cronin his$375,000 base salary and a $400,000 bonus this month, 'even if he is notworking' -- Cahn observed, 'There is no financial hardship to Cronin' inkeeping him on the shelf.

Cahn -- alluding to testimony by Herb Scannell,Nickelodeon's president, that Cronin had access to key MTVN 'trade secrets'that could benefit Fox Family -- said, 'There was no evidence adduced in the hearingthat Cronin had revealed any confidential information to Fox Kids or Saban, or that MTVNwas damaged in any way by the retention of the documents.'

As for the critical kids' upfront ad market,'that's no place, except for dribs and drabs,' until perhaps March,Croasdale said. Fox Family is a big player this year, adding 11 hours per day andthousands of 30-second spots to the kids' marketplace, Croasdale added, 'and[Fox Family] is prepared, I'm sure, to wheel and deal.'