The makers of television’s “Judge Judy” did not breach their contract with a talent agency by increasing the salary of Judy Sheindlin, the show’s star, to $47 million and treating it as a production expense, a California appellate court said Friday.
The predecessor of Rebel Entertainment Partners Inc. sold a court-oriented show featuring Sheindlin, a former New York family court judge, to producers Big Ticket Television Inc. and distributor CBS Corp. in 1995. As part of the transaction, CBS agreed to pay Rebel 5% of the show’s “defined proceeds,” calculated by gross receipts minus production expenses.
In 2009, CBS doubled Sheindlin’s salary to $45 million, and later increased it to $47 million, making her the highest-paid host on television, and substantially reducing the amount Rebel received.
Rebel sued CBS in Los Angeles Superior Court, asserting claims for breach of contract and breach of the implied covenant of good faith and fair dealing. It alleged the increase in pay should have been treated as a form of profit participation, rather than a production expense.
The trial court rejected that argument, finding CBS properly allocated the salary as a production expense. It granted summary judgment for CBS.
The California Court of Appeal, Second District, affirmed the ruling. Sheindlin testified that she provided non-negotiable salary demands to CBS every three years, and would have terminated the show’s relationship with CBS if her demands weren’t met, Justice Gerrard Chaney wrote in the unpublished opinion.
An expert at trial testified that Sheindlin’s salary was significantly higher than other television personalities, including David Letterman, Jay Leno, and Conan O’Brien, who all received no more than $28 million annually at the time Sheindlin was making $47 million.
But CBS was forced to accept Sheindlin’s demands, because failing to do so would jeopardize the show, Chaney said. Payments to her, therefore, constituted costs of production.
