In a case that highlights some of the tensions and battles for ad dollars between Santa Clarita media properties, the owners of The Signal have sued the paper’s former publisher Richard Budman, complaining that Budman has violated a non-compete contract by operating a rival media publication and poaching journalistic talent from The Signal.
The lawsuit -filed in September 2007 but revealed publicly for the first time here on SCVTalk- asks the court to award Santa Clarita Valley Publications, a sister company of The Signal, millions of dollars in damages. SCV Publications is owned by Morris Multimedia, the same Georgia based newspaper conglomerate that owns The Signal.
Budman owns and operates BGL Broadcasting, a media company that produces and broadcasts Santa Clarita news and variety shows on Channel 20 and its website under the name SCVTV. The company formally began its operation in August of 2007.
After a three year tenure as The Signal’s part-owner and publisher, Budman resigned in May of 2007 over disputes with Morris about the direction of the newspaper.
As part of his termination agreement, Budman signed a non compete clause agreeing not to produce “any newspaper, magazine, or similar printed advertising or other printed media in Los Angeles County for a period of 10 years,” according to the complaint.
He also agreed to not to solicit any subscribers or advertisers of SCV Publications or its “affiliated publications,” which includes The Signal.
Finally, he agreed not to “encourage” employees at The Signal and other Valley Publicatiosn companies to join BGL Broadcasting.
Budman and his wife were paid $125,000 upon signing the agreement.
“Basically, I signed a non-compete agreement when I sold my interests to Morris,” Budman told SCVTalk in an email. “When I left The Signal, I made it a point to honor this agreement and stay out of the print business,” Budman said.
But the complaint alleges that Budman violated those terms within months of leaving The Signal.
“SCVTV.com contains various forms of printed media and advertisements, all in violation of the Agreements,” the complaint reads.
SCVTV.com is home to web-based videos produced by Budman’s company.
“They tried to say that the SCVTV.com website was a print publication because you could print the pages of the site’s links,” Budman said.
Budman disputes the idea that SCVTV.com is a print publication. “Anyone can look at the website and see that it is not a print publication,” he said.
The suit also alleges that Budman and his company have encouraged “various employes of Valley Publications and its affiliated/parent company Morris Multimedia to leave and resign their positions of employment with such companies and join one or more of the Defendants.”
Such affiliated companies would include The Signal. The complaint says that Budman encouraged Leon Worden to leave his position as Editor of The Signal in June of 2007.
Finally, the suit alleges that Budman has attempted to “solicit and divert subscribers and advertisers” from SCV Valley Publications to SCVTV and SCVTV.com.
Videos produced by the company do have video advertisements from local businesses like Frontier Toyota, Henry Mayo Hospital and others. A small section of Google Ads appear on SCVTV’s homepage.
Overall, Budman says that the suit is intended to put Santa Clarita’s first independent televised news service out of business.
“They are basically forcing us to spend thousands of dollars to defend this. It is really a nuisance suit without any merit,” Budman said.
The complaint concludes by saying that Valley Publications has suffered “irreparable injury” to its business reputation due to Budman’s actions and asks for some $3 million in damages.
Budman said that Valley Publications asked for an injunction against BGL Broadcasting and SCVTV, but that was dismissed by a judge.
The lawsuit has yet to come to trial and both Plaintiff and Defense attorneys were still filing documents in Los Angeles Superior Court as of this week.
The Signal’s new publisher, Jay Harn, was contacted for this report but did not respond to a request for more information.
On the web:
Lawsuit (PDF)