LMNO Defends Keeping Commissioned Reality Show From Discovery

The Hollywood Reporter

On Wednesday, the embattled reality show producer LMNO Cable Group told a California federal judge that Discovery Communications is "trying to steal the fruit" of its labor without signing a contract and without paying the agreed purchase price for the second season of 7 Little Johnstons, a TLC series about a family of achondroplasia dwarfs.

LMNO currently is the subject of a federal investigation and is dealing with fallout from a former accountant who blew the whistle on alleged financial improprieties. The company, which also produces The Little Couple and more than a dozen other shows, is suing Discovery for allegedly taking advantage of this situation by attempting to take over ownership of its programs. Discovery has terminated contracts with LMNO and has filed counterclaims for breach of contract, trademark infringement and fraud.

Earlier this month, Discovery brought a motion aimed at compelling a handover of 7 Little Johnstons footage, saying that the series was produced as a "commission" and is now being held "hostage."

"Discovery should not have to pay a ransom for materials it already owns and that LMNO is unlawfully retaining," stated Discovery's court papers.

In its opposition brief (read here), LMNO says the series is not produced by LMNO Cable Group, but rather LMNO Entertainment Group, seemingly an affiliate. It's the latter that maintains possession of the footage and the court is told this matters.

LMNO adds that Discovery doesn't have any rights to the footage because it has specifically refused to sign a deal for the second season.

"If a prospective home-buyer came before the Court and demanded possession of a house after refusing to sign the purchase agreement, and having paid nothing but the deposit, the Court would dismiss the application out of hand," states LMNO. "Discovery deserves the same result."

LMNO says it is the owner of the footage under copyright law because it's the creator and there's no signed contract. Despite this argument, LMNO also tells the court the parties "negotiated and reached an agreement," with the unsigned deal contemplating that LMNO would assign rights in exchange for a $2.64 million flat fee.

As LMNO tells the judge that Discovery has no contractual entitlement to the footage, it also is complaining that Discovery only handed over about $2 million of what it was supposed to pay. "In short, Discovery has stiffed [LMNO Entertainment Group] for 24% of the agreed price."

So no signed contract, yet LMNO wants the money, and Discovery demands the footage.

To the latter, LMNO tells the judge, "That is like agreeing to pay an artist $10,000 to make a painting, paying him only $7,000, and then suing him for possession of the painting. The law does not give one a right to possession without payment of the agreed purchase price."