Sinclair faces $300 million countersuit

Ex-executive, rival firm object of $40 million suit

March 21, 2000|By Mark Ribbing | Mark Ribbing,SUN STAFF

A dispute involving Sinclair Broadcast Group Inc. and one of its former top executives has entered a new phase. Two months after Cockeysville-based Sinclair filed a $40 million lawsuit against Barry Baker and Emmis Communications Corp. over the rights to a group of St. Louis radio and television stations, Baker and Emmis have responded with a $300 million countersuit against Sinclair.

The whole affair began when Baker, the head of Sinclair's radio and television operations, resigned from the company Feb. 18, 1999. Under the terms of his employment contract with Sinclair, Baker could buy the company's stations in either of two markets: St. Louis or Greenville-Spartanburg, S.C. He picked the St. Louis properties, which consisted of six radio stations and one television station.

On June 24, Baker sold the station rights to Emmis, a Sinclair rival. The deal was announced the next day.

In Sinclair's view, the transfer of the rights to Emmis violated the terms of Baker's employment contract. True, the contract had stipulated that Baker could designate "any one or more persons or entities" to receive his station rights, but Sinclair insisted in its lawsuit that this provision was merely "an agreement to agree" and "is so vague as to be unenforceable."

The intention of the agreement, Sinclair said, was to allow Baker to transfer the stations to a company that he owned or controlled, not to an outside entity like Emmis.

The Emmis-Baker countersuit, filed late Friday afternoon in the Circuit Court for Baltimore County and announced yesterday, accuses Sinclair of -- among other things -- breaking its word, interfering with the contract between Emmis and Baker, and engaging in "gross mismanagement" of the disputed stations.

The countersuit contains 11 counts, seeking no less than $100 million in compensatory damages. The filing also seeks $200 million in punitive damages. In addition, the suit seeks an order that the sale proceed and the immediate appointment of a special receiver to manage the St. Louis stations, as well as binding declarations that the transferral terms in Baker's employment contract were "neither vague nor ambiguous" and that Emmis was a proper transferee.

Baker, now president and chief operating officer of USA Networks Inc., said Sinclair had named him in the suit because of his ties to the Baltimore area; pulling Baker into the litigation would help ensure that the case would be tried on Sinclair's home turf.

"They did attach me as a way to get them into a Baltimore courtroom," Baker said.

Sinclair declined to comment on the countersuit yesterday. Walter Berger, Emmis' chief financial officer, said he hoped the matter would not have to go all the way to court.

"Our hope and expectation is that we'll be able to resolve this. We'd like to be able to settle this," Berger said.

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