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Fox News Sues Over Zahn Move

Cable News Network's bitter rivalry with Fox News Channel exploded last week, as CNN recruited FNC primetime anchor Paula Zahn to host a new morning show — and Fox filed a lawsuit.

FNC sued Zahn's agency, N.S. Bientock Inc., for tortuous interference, accusing the company of inducing Zahn to breach her contract with FNC. Attorneys for FNC are also considering filing suits against CNN and Zahn.

"They [N.S. Bienstock] induced her to breach her contract. We've got to get to them first. And, through the discovery process and the lawsuit, we will be able to determine who else we need to sue," said FNC vice president of legal affairs Dianne Brandi.

FNC filed the suit on Thursday, one day after it announced that it had fired Zahn, the host of The Edge with Paula Zahn, for breach of contract. As FNC filed the suit, CNN held a Thursday press conference at New York's Time-Life Building to announce that it had hired Zahn.

While it's not clear how the litigation will unfold, one thing for certain is that FNC's move forced CNN to scramble to make the announcement months before it had expected to.

"I expected to make this announcement six months down the road," Zahn said in an interview, adding that she is "disappointed" with the way FNC handled the dispute.

Zahn's contract with FNC runs through Feb. 28. Brandi said Zahn broke the contract by negotiating a deal with CNN before March 1, which is when FNC's three-month right-of-refusal window begins.

Bienstock released a prepared statement that said the company "believes that this lawsuit is totally without merit. None of our actions, as agent for Paula Zahn, were in violation of her contract with Fox News. We are fully confident that this will be quickly resolved in our favor."

FNC claims in the suit that in addition to Zahn, Bienstock has lured some of the other talent it represents to CNN, including former ABC News reporter Aaron Brown, former NBC executive producer Kim Bondy, former ABC correspondent Shiela Macvicar, former ABC News executive producer Shelley Lewis, former WFTS-TV reporter Elaine Cagas Quijano and political analyst Michele Mitchell.

Sources said CNN offered Zahn a contract worth $2.1 million per year, more than tripling the $600,000 salary she earned at FNC. Zahn and CNN general manager Sid Bedingfield declined to discuss the terms of her CNN contract.

Bedingfield dismissed FNC's claims. "We made what we believe and know to be a contractually legal offer to Paula," he said.

Zahn also said there was no wrongdoing on her part. " 'I certainly have handled myself with the highest degree of honesty and integrity," she added, noting that legal counsel had advised her on contractual issues throughout the process.

The lawsuit comes as CNN and FNC are running virtually neck and neck in the ratings race, with each news network averaging a 0.7 Nielsen Media Research primetime rating in August. But FNC notes in the lawsuit that while its viewership has jumped by 430 percent in the last three years, CNN's has declined by 28 percent.

CNN, which named former Time
editor Walter Isaacson its CEO in July, has revamped its schedule in the last year, adding several personality driven shows such as Jeff Greenfield at Large
and Wolf Blitzer Reports.

The company has also hired more big-name talent, including former NYPD Blue
actress Andrea Thompson and Brown, the former ABC reporter who will anchor a new primetime newscast this fall.

Bedingfield told reporters that CNN hopes the new morning show, which will debut in the late spring, will drive ratings growth across the network.

"It's going to be at its core about great journalism. But also, we're going to make the commitment to make it fun and maybe a little surprising at times," Bedingfield added.

Zahn has experience with morning shows. She co-hosted CBS This Morning
for six years before joining FNC in 1999.

The show will be based at a street-level studio in Manhattan, mimicking the street-level studios used by the CBS, ABC, NBC and FNC morning shows.

Bedingfield said CNN might use Zahn on other programs before the morning show debuts.

FNC replaced Zahn's 10 p.m. program with Fox News Edge, which has a format similar to Zahn's interview show. The network has narrowed down the search for a permanent replacement anchor for the timeslot down to four candidates, from both within and outside the network, a source said.