Cronin sues Fox Family
By John M. Higgins -- Broadcasting & Cable, 10/14/2001 8:00:00 PM
With Disney agreeing to pay $5.3 billion for Fox Family Channel, former President Rich Cronin wants his piece of the action.
Cronin sued the network's parent company to get paid on stock options he had in the company during his two-year stint there. When Fox Family hired him in 1998, Chairman Haim Saban gave him options equivalent to 1% of the company's equity. After squeezing Cronin out last year, Saban is now saying he was fired "for cause," which extinguishes the options.
The options are worth a lot. Saban Entertainment and News Corp. paid $1.9 billion to bring The Family Channel into what was then Fox Kids Worldwide, which was worth about the same amount. After paying off debt, the deal reflected a $1.1 billion or so spike in equity value. Cronin wants 1%.
Speaking through rep Anachel Communications, Cronin said, "I have tried to privately settle this matter out of court, but Fox Family has refused to honor my contract. I am to go public by filing this law suit." Fox Family wouldn't comment.
Cronin took a big salary cut at his current job as president of Game Show Network. Part of his damage claim is that he joined GSN with nine weeks left on his old contract, so Fox should make up any shortfall in his $1.2 million annual salary. That's about $10,000 per week, and that means Cronin is getting $500,000 a year less than he was.
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