An Extremely Mild Defense of Clinton’s CBS Phone Call

In today’s Wall Street Journal, Joe Flint and John Harwood report yet another Clinton scandal: Before he left office, Clinton intervened in a contract dispute that producers Harry Thomason and Linda Bloodworth-Thomason had with CBS chief executive Leslie Moonves. Moonves is a Clinton friend, but the Thomasons are, of course, much closer Clinton friends. Thomason’s beef was that CBS had failed to fork over a “penalty fee” of more than $1 million for not airing a Thomason-developed comedy series starring Janine Turner called The Good Life during the 1996-97 television season. A penalty fee is a little bit like a golden parachute. A television producer with one or more big hits under his belt is often in a position to write into his contract that the network must pay him a huge penalty fee if it fails to air his show. The idea is that the network will not want to write a fat check and will instead put the show on the air. The problem is that the networks frequently welsh on the deal. Or, as the Journal piece delicately puts it: “Networks often seek to defer paying penalty fees.”

Clinton phoned Moonves to discuss the unpaid penalty fee. Shortly thereafter, CBS forked over most of the fee to Thomason. “It really is an inappropriate use of presidential power to get involved in a personal financial dispute,” former Clinton chief of staff Leon Panetta told the Journal. “I think that crosses the line.” Chatterbox agrees. Unlike, say, John Kennedy’s famous jawboning with the steel industry to keep prices down, this intervention doesn’t touch on anything even vaguely resembling the public interest. And there’s a creepy, Godfather-like feel to it. If CBS had refused to pay off Thomason, would Moonves have woken up the next day with a horse’s head in his bed?

That said, Chatterbox must also point out that it’s hard to weep for CBS. He doesn’t know the particulars of this deal, but in general, the networks have an abysmal record when it comes to honoring contracts. How abysmal? Chatterbox logged onto the Dow Jones News Retrieval database, which contains just about every significant business story published in the United States, and searched for the phrase “breach of contract” coupled with words that describe various large industries known for generating litigation. Here are the results, in declining order:

“breach of contract” and “television”: 1,066 stories
“breach of contract” and “Internet”: 1,063 stories
“breach of contract” and “real estate”: 656 stories
“breach of contract” and “software”: 653 stories
“breach of contract” and “health care”: 540 stories
“breach of contract” and “airline”: 208 stories
“breach of contract” and “steel”: 192 stories

According to the Chatterbox Contract Dispute Index™, contracts in the television industry would seem to be far more subject to, ah, revision than contracts in other industrial sectors. This is especially true when you consider that the number of people who work in the TV industry, most of them confined to Southern California, is far smaller than the number of people who work in these other businesses. The only industry that really gives television a run for its money, breach of contract-wise, is the Internet. Despite the public’s loathing for the airline industry, it has produced fewer than one-fifth as many breach of contract stories as television. Real estate, the industry sector that Chatterbox would have thought generated the most lawsuits, produces just a little more than half as many breach of contract stories as television. And surely the small number of breach of contract stories produced by the steel industry is yet another index of the decline of Big Steel.