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Artnell Company v. National Broadcasting Co.

APRIL 5, 1972.

ARTNELL COMPANY, PLAINTIFF-APPELLANT,

v.

NATIONAL BROADCASTING COMPANY, INC., DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. DANIEL A. COVELLI, Judge, presiding.

MR. JUSTICE ADESKO DELIVERED THE OPINION OF THE COURT:

On August 3, 1966, Artnell Company and National Broadcasting Company, Inc., entered into a radio broadcasting contract by the terms of which NBC was to broadcast over WMAQ AM and FM, NBC's Chicago radio stations, all of the White Sox games in 1967 and 1968 and was to pay Artnell $350,000 in 1967 and $375,000 in 1968. This agreement could be extended to cover 1969 and 1970 by written notice from NBC to Artnell. If said agreement were extended to cover 1969 and 1970, NBC agreed to pay Artnell $400,000 for each of said years.

On October 14, 1966, Artnell finalized an agreement for the telecast of the White Sox games with WFLD-TV, a television station in Chicago. After a conference between Arthur C. Allyn, Jr., President of Artnell and Mark Olds, station manager of WMAQ AM and FM, Allyn agreed to guarantee WMAQ its expected profit from radio broadcasts thus protecting it against the adverse effect of the television contract. Artnell and NBC executed the October 14, 1966 agreement amending the August 3, 1966, contract. It guaranteed NBC a net operating profit from radio coverage of $200,000 for 1967 and $250,000 for each subsequent year. This agreement provided that to the extent NBC's net operating profit from broadcasting the games fell short of the guaranteed amount, WMAQ had the right to offset against the rights payment it was obligated to pay Artnell under the initial August 3, 1966, broadcast contract. Allyn and Artnell's attorney reviewed the provisions of the October 14, 1966 agreement before Allyn signed it.

On March 8, 1968, the agreement of October 14, 1966, was amended further to provide that Artnell guaranteed a net operating profit to NBC of $200,000 each for 1967 and 1968 and $250,000 for each subsequent year. The March 8, 1968, document was a letter from NBC signed by Harry D. Jacobs, Jr., manager of WMAQ, addressed to Allyn, President of Artnell Company, and agreed to by Artnell Company by A.C. Allyn, Jr., President.

Each of the parties performed its obligation under the August 3, 1966, agreement and the amendments of October 14, 1966, and of March 8, 1968 until August 1968.

On July 29, 1968, Harry D. Jacobs, Jr., station manager for WMAQ AM/FM notified Allyn that it would be necessary to preempt some White Sox broadcasts on WMAQ AM to furnish coverage of the sessions of the Republican and Democratic presidential political conventions. The games in question would be broadcast over WMAQ FM and the White Sox baseball network which was a network of radio stations in the Midwest which receive and re-broadcast the radio broadcasts of White Sox games. All advertisers for the preempted broadcasts were given substitute advertising time by WMAQ so that the revenue to Artnell was unaffected. No advertising revenue was lost to WMAQ or NBC. Allyn testified that there was no loss of income due to the preemptions.

Artnell informed NBC on August 2, 1968, that preempting of any White Sox broadcasts would constitute a violation of the contract and would hold NBC liable for damages. On August 5, 6, 8, 26, 27, 28 and 29, 1968, WMAQ broadcast the proceedings of the Democratic and Republican national conventions and preempted the White Sox baseball games played on said dates. Artnell's complaint was filed September 23, 1968.

It appears that the plaintiff found no fault with the contract of August 3, 1966, and the amendments of October 14, 1966, and March 8, 1968, until after NBC's preemption of the baseball games.

Plaintiff filed a motion for summary judgment as to the liability of NBC under Counts 1, 2 and 4 of Artnell's complaint, asking for:

1. "A declaratory judgment that certain amendments to the radio broadcasting contract between Artnell and NBC were invalid and unenforceable for lack of consideration;

2. A decree ordering NBC's specific performance of the original terms of the broadcasting contract; and

3. A decree that NBC's preemption of seven of the White Sox games was a breach of contract."

NBC filed a cross-motion for summary judgment as to the same counts in which it agreed that there was no genuine issue as to any material fact relevant to NBC's liability under those counts.

Plaintiff appeals from an order denying plaintiff's motion for summary judgment under counts 1, 2 and 4 and entering summary ...


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