NBC alleges that it is owed $1 million-plus by Ginn Companies as part of a deal where the developer would purchase time and offer a Ginn-sponsored tournament. NBC was to receive an average of $254,000 per hour, perhaps slightly more.
But after suffering from the real-estate crash, Florida-based Ginn pulled the plug on the LPGA tournament. In court papers, NBC says Ginn is still on the hook for fees promised to rent four hours of airtime in early June.
The "Ginn Tribute Hosted by Annika Soremstam" was carried on NBC in 2007 and 2008. And Ginn's sports marketing arm paid the network the required fees both years -- minus a small amount in production costs, NBC says.
In court papers, NBC says the three-year, $3 million-plus deal called for Ginn to also fund a live broadcast in 2009. Although the event was canceled, NBC says Ginn still owes it $1 million-plus.
Ginn had no out clause. If the tournament was canceled, NBC says Ginn had to provide it with alternate programming -- and failed to do so.
NBC is seeking at least $1.2 million in damages. Network parent NBC Universal filed the breach-of-contract suit in New York State Supreme Court on July 21.
A Ginn representative did not immediately return a call seeking comment. An NBC representative declined to comment on pending litigation.
Through its sports-marketing arm, Ginn has sponsored multiple pro golf tournaments -- including PGA events -- as it looked to draw attention to its real estate and resort ventures.
But late last year, Ginn said the housing crisis had forced it to discontinue all golf sponsorships. The company filed for bankruptcy on four of its projects.
The PGA also has a suit pending against Ginn in Florida, alleging that canceled tour events cost it television dollars and other revenues. A PGA representative said Ginn has admitted liability and the parties are negotiating on damage payments.
Court papers say the contract for the LPGA event called for Ginn to pay NBC a minimum of $1.02 million annually for three years. Ginn would receive four hours of airtime per year -- two hours each on a Saturday and Sunday. Ginn also had to pay production costs.
Ginn would also get rights to sell 70 of the 80 spots a year. NBC would receive rights to the remaining 10 spots. Court papers say Ginn could also purchase NBC's 10 units at a price of $13,500 a spot ($135,000 per year).
The 2009 "Tribute" event was to take place at a Ginn-owned South Carolina development, where it was held the last two years. The $2.6 million in prize money reportedly was more than all other LPGA events, except the U.S. Women's Open.
In addition to the Ginn case, NBCU has another breach-of-contract suit involving a time buy pending in New York. NBC alleges that Championship Off Road Racing (CORR) owes it $4.8 million for dirt-track events in 2008 and 2009. CORR collapsed after financial turmoil last year.