Fronteras Entertainment, an independent production company based in Burbank, signed a deal with Telemundo’s Los Angeles TV station, KWHY, to provide shows for KHWY that would later appear on Telemundo. KWHY was to pay for the studio and pay a license fee of $4,000 per episode for 220 episodes for 20 TV seasons, the complaint said. KWHY would be licensed to broadcast the programs in Southern California and Phoenix, Ariz.; Fronteras would retain the rights elsewhere. Fronteras claims the licensing fees would top $17 million.
Telemundo said it would respond to the complaint in court. “The plaintiffs have decided to inflate a garden-variety contractual dispute concerning the cancellation of a failing program with absurd and inflammatory claims,” a Telemundo spokeswoman said Tuesday afternoon.
One hundred twenty episodes of the first program under the deal, El Show del Pueblo, aired. But Fronteras claims Telemundo terminated the agreement following its April 2002 acquisition by NBC. Fronteras is seeking more than $34 million in damages in a federal lawsuit in the U.S. District Court for the Central District of California. It claims, among other things, fraud, negligent misrepresentation, beach of contract, copyright infringement.
An additional claim is made under the Civil Racketeer Influence and Corrupt Organizations Act, also known as RICO. The lawsuit alleges that a KWHY executive asked to be given an ownership stake in Fronteras in exchange for support with KWHY and Telemundo.
Fronteras claims Telemundo told it that the deal was to create an “in-house” production studio for the network and that Fronteras’ shows would be test-marketed in California before running them on the entire network. But owing to ownership restrictions, the Telemundo purchase gave NBC one more TV station in Los Angeles than is allowed by the FCC. NBC has until April 2003 to sell KWHY.
Although El Show del Pueblo began to air, Fronteras claims KWHY and Telemundo gave little sales, programming or promotional support, which hurt it in the ratings. The show was canceled Oct. 4 and Fronteras has been paid $1.6 million.