Madison Road Entertainment filed a counter suit last week against affiliates of Mark Burnett Productions, claiming defamation and libel. Burnett had filed suit earlier this month, charging that Madison Road lied about a relationship with Burnett and charged “exorbitant” fees from sponsors of tasks for the hit show, The Apprentice.
Companies like Burger King, Home Depot and Pepsi, which have all been task sponsors on the show, pay millions of dollars for the opportunity, gaining enormous exposure for their products and brands.
In the Mark Burnett Productions suit, filed March 3 in California state court, Burnett charged that MRE fraudulently claimed that it had existing relationships with potential sponsors and therefore Burnett did not try to contact those sponsors directly. Because an intermediary was involved, Mark Burnett Productions received substantially less money for the deals than it would have if it had contacted the sponsors directly. The charges date back through at least August 2004, the complaint said.
Reports said that MRE marked up the estimated $2 million to $3.5 million fee that Mark Burnett Productions charges by $7 million. No task sponsors were mentioned in the suit, however, the New York Post last week identified Crest, Levi’s and Mars as being connected to Madison Road and placement on The Apprentice.
“Having made potential sponsors believe that only by dealing with MRE can they participate in The Aprentice, MRE then demanded that these sponsors enter into agreements calling for them to pay exorbitant sums in the event that a task is successfully produced on The Apprentice,” Mark Burnett Productions said in the complaint.
Mark Burnett Productions said that in the vast majority of sponsor deals, it has either approached the sponsor or the sponsor has approached it, without help from an intermediary. The sponsors pay start-up fees and provide facilities and assistance if needed. Once the task is successfully produced and broadcast, the sponsor pays Mark Burnett Productions a “considerable” sum, negotiated as an upfront flat fee, in exchange for the exposure.
On Feb. 15, Mark Burnett Productions had sent a cease-and-desist letter to MRE, demanding that it stop making representations that it was Burnett’s agent. It also requested a complete list of persons or firms it had contacted with promotional activities related to The Apprentice. The complaint said that MRE had failed to “adequately” respond to the letter.
In the lawsuit, Mark Burnett Productions asked that MRE stop seeking out potential task partners for The Apprentice, to disclose the list of contacts, to make a public statement that its representations were false, as well as unspecified monetary damages.
Mark Burnett Productions said it never hired MRE or authorized it to solicit sponsors and that the demands to sponsors were “destroying goodwill” for both The Apprentice and Burnett affiliates. The affiliates, Archie Worldwide in Los Angeles and CJ Worldwide also Los Angeles, are production companies for The Apprentice.
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