Clear Channel Countersues Infinity
July 21, 2004

UPDATED -  Clear Channel today countersued Infinity and One Twelve Inc, claiming that Howard Stern breached his contract by providing programs that didn't comply with federal indecency regulations. The $3 million counterclaim accompanied Clear Channel's response to a $10 million suit filed by Stern distributor Infinity and Stern company One Twelve on June 30 in Manhattan federal court. That suit argues that Clear Channel wrongfully failed to notify them when it pulled the show from six of its stations on February 25.

In its countersuit, Clear Channel alleged that those license agreements required the program to be delivered in conformance with all applicable laws and regulations. And that Stern breached his deal by delivering shows that weren't in compliance. Then, after the FCC hit the company with a $495,000 indecency fine for an April 9, 2003 Stern broadcast, Clear Channel had to cut the chord with Stern because he and Infinity refused to provide any assurances that there would be no further breaches.

Without assurances, Clear Channel "was in a box," the suit states. "It could either continue to broadcast the programs supplied by the Plaintiffs, without any right to preview, edit or alter, and hope that the programs would not place the Defendant in any further legal jeopardy with the FCC, or it could cease broadcasting the programs supplied under the License Agreements."

Clear Channel claims it was prohibited from making any changes to the show -- even when tape-delaying it for broadcast in other time zones would have lended itself to the editing of offensive material.

Infinity and Stern have long maintained that the show is not indecent.

"The radio show was pulled because Mr. Stern and Infinity refused to assure us that future programs would conform to the law," said CC Chief Legal Officer Andy Levin. "That was a key term in the agreement, and we gave them every opportunity to make good on their word before we permanently retired the show. We simply weren’t willing to put the future of our radio station licenses in the hands of Mr. Stern or Infinity. Fortunately, our contract doesn’t require us to do that."

Among the damages the company is seeking: lost advertising revenue, refund of monies paid between the time CC suspended Stern (late February ) and when it fired him (April), attorney fees, and indemnification of the portion of the $1.75 million the company paid the FCC that was attributable to the Stern show.




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