After a heated four-month legal battle centered on a contract dispute, financial news site TheStreet.com Friday settled with Fox News Network L.L.C.
The two erstwhile partners exchanged lawsuits after TheStreet.com canceled the weekly television show — also called TheStreet.com — it produced with Fox for the network. TheStreet.com canceled the show on May 17, but Fox said the company had a three-year contract and TheStreet.com couldn’t cancel the show before May 7, 2001, the end of the second year of the contract. Fox also had a contract with TheStreet.com’s largest shareholder, hedge fund manager James Cramer, stipulating that he had to appear on the show 40 times a year for three years.
The showdown between the two was precipitated when Cramer, who owned about 3.3 million shares of TheStreet.com as of April 28, appeared on the show on April 15 and urged investors to purchase TheStreet.com’s faltering stock. Fox News responded by issuing a new policy that prevented commentators from discussing stocks they own. Cramer’s actions also drew a critical commentary by the editor-in-chief of TheStreet.com’s site as well as criticism by unnamed Fox News executives in an April 26 newspaper article.
In response, TheStreet.com canceled the show, saying Fox News had breached its contract by changing compliance policies without notifying it and by publicly disparaging the company.
Fox then sued the Web site and Cramer for breach of contract arguing TheStreet.com was using the controversy as a pretext for canceling the show and selling it to a competing television network. That led Cramer to file a countersuit on June 6 in which he claimed that the Fox News policy had been applied only to him. He said Rupert Murdoch, owner of News Corp. — parent of Fox News — had appeared on Fox News on Feb. 10 and said News Corp. stock was “very, very cheap,” compared to other stocks.
But all that was put to bed Friday. “We want to get back to business and we were able to come to an agreement with them,” said Jordan Goldstein, vice president and general counsel of TheStreet.com. “As part of the settlement we dropped our countersuit. All the litigation is settled.”
The settlement prevents TheStreet.com from producing a television program similar to TheStreet.com show until May 1, 2001. It also stipulates that TheStreet.com direct $10,000 to the Eric Breindel Foundation in the name of Fox News, “where the resources will be directed to a positive cause,” according to a statement.
Goldstein declined to comment on any other details of the settlement.
“We are satisfied with the settlement, which validates Fox News’ legitimate interests in enforcing its contractual rights concerning the cancellation of the television program,” he said.
Dianne Brandi, vice president Legal Affairs for Fox News, added, “We are pleased that the settlement has worked out to our satisfaction.”
