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WOHL VS. BLOCK: TV stations take battle to court
(Lima News, The (Ohio) (KRT) Via Acquire Media NewsEdge) Aug. 2--LIMA -- The uglier, private side of the business world took center stage Friday in an Allen County courtroom as local television station owners tried to save their station and financial future.
Greg and Kathleen Phipps, owners of WOHL, filed a lawsuit against WLIO's parent company, Block Communications. Block is trying to take over the local FOX affiliate and gain a stranglehold on local television options.
The Phipps' are seeking an injunction to stop the deal from going through until a trial can be held in December. Court will resume Monday morning for additional arguments on the injunction.
Phipps was on the verge of completing a threeyear deal in late spring to maintain his rights to the FOX affiliate when Block began talking to FOX Broadcasting to take over. Subsequently, the contract -- which was on a desk needing one signature to ink the new deal with Phipps -- never received that signature.
Block, through WLIO, represented a chance for a more stable financial partner with FOX. Also, WLIO has a full-power signal transmission station, unlike WOHL's low-power station, its attorney, Keith Wilkowski, of Toledo, said.
The key factor Allen County Common Pleas Judge Richard Warren has to determine for the injunction is whether the Phipps' will face irreparable harm and have a good argument to offer.
Wilkowski said FOX Broadcasting has every right to operate its business in a free market. FOX has an ongoing search for a full-power carrier, and switching to WLIO would provide that.
Also, the contract in Phipps' possession says FOX Broadcasting has the right to end the contract -- especially if it can find a full-power affiliate to switch to. The contract only required a 60-day termination notice, Wilkowski said.
Both sides accused each other of shoddy business ethics.
The matter started as Phipps struggled to pay his bills and sought to sell the station. It continued to struggle financially, especially with a national economic downturn over the past two years. Phipps owed $40,000 in past-due bills -- mostly to FOX -- and had arranged a payment plan. He was working hard to follow that when Block came into the picture.
If Phipps could find a buyer, Phipps could have paid his debt and perhaps come away with some profit. Block expressed serious interest in the purchase. Block wanted to review WOHL's books, agreeing it wouldn't use any proprietary information against WOHL.
Phipps also was interested in preserving a legacy he believed he built for his name locally, his attorney Marc Kessler said.
"Perhaps somebody with more capital and experience can continue to build, and his legacy would be preserved," Kessler said.
Judge Warren told the attorneys that the real issue is if Block used any information gained by looking at WOHL's books while that non-disclosure agreement was in place.
Phipps even had one serious offer for up to $3 million from an unnamed party, not Block, along the way, according to testimony.
Kessler said WOHL has up to 40 employees who would lose their jobs if Block can pull the FOX affiliation out from under Phipps.
A series of e-mails, notes and statements were entered into evidence, some that included jokes and some with personal attacks.
In June, WLIO President and General Manager Bruce Opperman prepared a press release announcing WLIO will become the new FOX network effective in September with the NFL football schedule.
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Copyright (c) 2008, The Lima News, Ohio
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