American Broadcasting Companies, Inc. v. Wolf

76 A.D.2d 162, 430 N.Y.S.2d 275, 1980 N.Y. App. Div. LEXIS 11745
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 10, 1980
StatusPublished
Cited by11 cases

This text of 76 A.D.2d 162 (American Broadcasting Companies, Inc. v. Wolf) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Broadcasting Companies, Inc. v. Wolf, 76 A.D.2d 162, 430 N.Y.S.2d 275, 1980 N.Y. App. Div. LEXIS 11745 (N.Y. Ct. App. 1980).

Opinions

OPINION OF THE COURT

Sullivan, J.

At issue is whether, at the instigation of CBS, Warner Wolf, a sportscaster, breached the good faith negotiation and first refusal provisions of his contract with ABC and, if so, whether ABC is entitled to equitable relief. Contrary to Trial Term’s finding, we hold that Wolf did indeed breach his contract, although we also conclude that the grant of equitable relief is not warranted.

Wolf had been employed by ABC since 1976 as a sportscaster, and for the past three years he had been the regular [164]*164sportscaster on WABC-TV, its New York affiliate. In February, 1978, he and ABC negotiated an employment agreement which, by virtue of ABC’s subsequent exercise of a renewal option, had a termination date of March 5, 1980. The agreement contained what is commonly referred to in the broadcasting industry as a "first negotiation/first refusal” clause. It provided: "You agree, if we so elect, during the last ninety (90) days prior to the expiration of the extended term of this agreement, to enter into good faith negotiations with us for the extension of this agreement on mutually agreeable terms. You further agree that for the first forty-five (45) days of this negotiation period, you will not negotiate for your services with any other person or company other than WABC-TV or ABC. In the event we are unable to reach an agreement for an extension by the expiration of the extended term hereof, you agree that you will not accept, in any market for a period of three (3) months following expiration of the extended terms of this agreement, any offer of employment as a sportscaster, sports news reporter, commentator, program host, or analyst in broadcasting (including television, cable television, pay television and radio) without first giving us, in writing, an opportunity to employ you on substantially similar terms and you agree to enter into an agreement with us on such terms. We shall have five (5) business days following receipt in which to accept such offer as it is made or make changes that are not, in the aggregate, material; and we shall be required to match the character of employment only in substance and not in every particular. Any such written notice from you to us of an offer received shall specify compensation; term of employment, options to terminate, character of employment, and other principal terms and conditions.”

Thus, under this clause Wolf agreed to negotiate in good faith with ABC during the 90 days preceding the March 5, 1980 expiration date for an extension of the contract on mutually agreeable terms. Wolf agreed to negotiate exclusively with ABC during the first half of the 90-day period, and, if he and ABC could not reach an agreement for an extension of the contract, not to accept, for a period of three months after the expiration of the contract, an offer of employment as a sportscaster without first giving ABC, in writing, an opportunity to employ him on substantially similar terms. If ABC failed to offer him a similar contract within five business days after receipt of such written offer, Wolf was free to accept the other offer at any time.

[165]*165At his request Wolf met with WABC executives in September of 1979 (almost two months before they were required to do so under the contract) to discuss a renewal contract. At that meeting Wolf, who was receiving an annual compensation of $150,000 in the last year of the 1978 agreement, requested a two-year contract at an annual compensation of $400,000 for the first year and $450,000 for the second year. He also wanted the opportunity to do 16 half-hour football specials. ABC countered with a three-year offer at an annual graduated salary of $325,000, $367,500 and $400,000. ABC would not agree to Wolfs request to do football specials, however, and asked for additional time until October 15. Wolf, who was anxious to have the matter resolved, agreed.

Unknown to ABC, Wolf met with representatives of CBS on October 4, 1979, and expressed interest in joining CBS, requesting a two-year contract on the same terms he had requested of ABC. At that meeting Wolf discussed the good faith negotiation and first refusal provisions of his ABC contract and, in fact, gave a copy of the first page of his ABC contract containing those provisions to CBS’ representatives. On that copy, received in evidence at trial, the following was underscored: "you agree that you will not accept, in any market for a period of three (3) months following expiration * * * any offer of employment as a sportscaster”.

Wolf and ABC’s representatives met again on October 12, with Wolf expressing willingness to reduce his salary demands if ABC would commit itself to the 16 football specials. ABC increased its salary offer, but still refused to agree to the other terms and promised "to get back” to Wolf in 10 days. Four days later, on October 16, unknown to ABC, Wolf again met with CBS’ representatives. Wolfs contractual demands were again discussed, as were the terms of the good faith negotiation and first refusal provisions.

Despite the promise ABC did not contact Wolf again until January 2, 1980. At this time Wolf refused to "budge” from his original salary demand of $400,000/$450,000. A subsequent meeting took place on January 17, and the next day Wolf was given a written proposal which provided for a three-year contract at an annual compensation of $400,000/450,000/ 500,000, with a commitment for the 16 half-hour football specials subject, however, to approval by ABC’s board of directors. Wolf advised that he would not accept the offer because of ABC’s delay in getting back to him and the immi[166]*166nent expiration of the 45-day exclusive negotiation period. He also told ABC that his lawyer had advised him to "see what the other options are.” Wolf agreed to get back to ABC within a week.

On February 1, Wolf again met with CBS’ representatives and advised them that he wanted to work at CBS at the earliest possible date. By the close of their meeting CBS and Wolf had agreed on the terms of Wolfs employment as the WCBS sportscaster, and the parties shook hands on the deal. No discussion took place about any producer’s contract, or of splitting Wolfs employment into two separate contracts, or of Wolfs freedom to accept an off-air position prior to June 4, the termination date of ABC’s right of first refusal. Wolf acknowledges that at the February 1 meeting "the oral understanding was $400,000 for my sportscasting services.”

That weekend (February 2-3), a CBS executive called Wolf and advised him that CBS had prepared two different contracts, one a producer’s agreement for immediate execution, and the other the sportscaster’s agreement. According to Wolf, CBS’ executive told him "We’re going to divide up the money, one in an on-the-air sportscaster’s contract, another on off-the-air sports producer’s contract. We’ll divide the $400,000 in equal parts of 200, 200. Second year 225, 225”, to which Wolf replied "Fine, it makes no difference to me.”

On Monday, February 4, Wolf was presented with two contracts, one an 18-page sportscaster’s agreement signed by CBS, annexed to which was a one-page letter, also signed by CBS, providing that in return for $100 paid by Wolf "WCBSTV agrees to hold open its offer of employment, under the terms and conditions set forth in the attached draft agreement, until June 4, 1980, and WCBS-TV shall not withdraw such offer prior to that date.”

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Bluebook (online)
76 A.D.2d 162, 430 N.Y.S.2d 275, 1980 N.Y. App. Div. LEXIS 11745, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-broadcasting-companies-inc-v-wolf-nyappdiv-1980.