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The purloining of Paula - Broadcasting & Cable

The purloining of Paula

Fox fires Zahn and sues her agentfor contract breach; she signs with CNN
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The announcement that Paula Zahn was moving from Fox's cable news network to CNN came, in her estimation, about six months early.

"I'm as surprised as anyone to be here today," she told reporters last Thursday, one day after Fox News Channel fired her for negotiating with CNN, which also cleared the way for her to figure into CNN's plans for a new morning show. Her press conference, at CNN's New York facilities, took place on the same day Fox filed a lawsuit against her representatives, the prominent talent agency N.S. Bienstock, charging that the negotiations with CNN violated Zahn's contract.

Zahn, one-time co-anchor of CBS's morning show, will host a new CNN morning show from a new street-level studio in the Time-Life building in New York City. CNN News chief Walter Isaacson says the show will benefit from Zahn's early arrival. "One of the great things about having Paula do this with us is we get to sit down for a few months now and see how can we do something interesting."

Sources say Zahn will receive more than $2 million a year under her new contract—considerably more than the $800,000 Fox is said to have offered—but others say the $2 million figure is inflated.

Fox's suit against Bienstock contends that the agency had intentionally and illegally interfered with her Fox employment. Fox says it is considering other actions as well, possibly against Zahn or CNN. Zahn, CNN and Bienstock deny any impropriety.

Fox says that its deal with Zahn expressly laid out a right of first refusal for three months after the contract term ended and that this prohibited any such negotiations with other potential employers before. Otherwise, Fox says, any employee could negotiate with another potential employer at any time, and the exclusivity of the contract would be meaningless.

In its complaint, Fox says that it learned of the deal with CNN and informed Zahn in writing that, under her contract, "she was not permitted to solicit, entertain, or accept any third party offers prior to the expiration of the agreement on February 28, 2002."

Fox accuses Bienstock of siding with CNN in its "efforts to reorganize its newscast programming." The lawsuit left other agents wondering how Bienstock and Fox's relationship would be affected.

According to published reports, Fox News chief Roger Ailes referred to Zahn's representative Richard Leibner—arguably the best-known, most powerful agent in TV news—as "a liar" and unethical. He also disparaged Zahn's performance at his network, where she was host of The Edge With Paula Zahn. Bienstock—specifically agent Carol Cooper, Leibner's wife—also represents Bill O'Reilly, probably Fox's best-known personality.

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