Rich Cronin wants his cut of the $5.3-billion sale of Fox Family Channel to The Walt Disney Co., so the former Fox Family president last week filed a breach-of-contract suit against his ex-employer.
Cronin is looking to recover $12.7 million in compensatory damages and unspecified punitive damages.
The suit, filed in Los Angeles Superior Court, is against Fox Family Worldwide Inc. The complaint alleges that the company is trying to bar Cronin from using his stock options to cash in on the pending sale. Disney's purchase of Fox Family is expected to close by the end of the year.
Cronin, now president of Game Show Network, claims Fox Family Worldwide owes him $712,900 in wages. The suit also charges that Fox Family "has refused to acknowledge Mr. Cronin's ownership of Fox Family stock options, worth a minimum of $11.9 million."
A Fox Family spokeswoman said that the company has a policy of not commenting on pending litigation.
Cronin was "ousted" by Fox Family Worldwide chairman Haim Saban on May 22, 2000, according to the suit. At that time, Saban came in and told Cronin it was his "last day." The only explanation offered for the dismissal was that "some executives were 'against' Mr. Cronin," the suit alleges.
In the suit, Cronin contends that his decision to leave MTV Networks — where he was retro network TV Land's general manager — was contingent upon his getting equity in Fox Family, as well as a lucrative salary package. The suit claims Cronin's contract, dated Oct. 17, 1997, guaranteed him a minimum of three years employment, a starting base salary of just over $1 million, a bonus and "nonqualified options for at least 1 percent of the stock in Fox Family."
Cronin argues that his work at Fox Family — which included boosting its carriage to 77 million from 72 million during his tenure — helped increase the company's worth. Saban Entertainment and News Corp. acquired the network, then known as the Family Channel, in 1997 for $1.9 billion; the sale price now is $5.3 billion.
"The increase in Fox Family's value was due in large part to Mr. Cronin's leadership and accomplishments, including the increased Fox Family Channel distribution," according to the suit.
As part of Fox Family's sale, the company "will make certain cash payments to its stock option holders to cancel all outstanding options held by each owner," the suit said. "Fox Family's stock currently has a value of at least $3 billion. This value is significant because … Mr. Cronin is contractually entitled to, and has been deprived of, options equal to 1 percent of the stock of Fox Family," the lawsuit said.
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