Former Owner Jay Penske of "Variety" Sued for $10 Million

Variety Media and racing heir Jay Penske's Penske Media Corp. have filed a second lawsuit charging that when it was sold the trade publication in Oct. 2012, the then-owner did not reveal contracts with a promotional partner and with a printer that would require payments of millions of dollars.

The May 8 suit filed in New York Supreme Court claims Reed Business Information and Reed Elsevier Properties owes at least $10 million. Penske wants the sellers to indemnify his company against any liabilities or losses from business transactions that were not disclosed prior to the sale.

The two claims that Penske and the new Variety dispute are with the Beverly Hills Media Group, which it has sued separately, and California Offset Printers, which this past March refused to indemnify Penske/Variety from costs under the disputed contract.

Beverly Hills Media Group allegedly made a deal with the former owners in March 2012 -- less than a month after Variety was put on the sales block --  to establish a joint venture related to a planned Beverly Hills Entertainment Week, a festival focused on film, TV, new media and finance.

The agreement gave BHMG 50 percent of the gross revenues from sponsorships in connection with the planned festival and all costs were to be paid by Variety. Later, says the suit, BHMG claimed that the rights were even broader than that and would exist in perpetuity.

BHMG then came to the new owners and said the deal granted it “exclusive rights” to multi-event, year round sponsorships for Variety, well beyond the one festival.

Penske/Variety agreed to arbitrate the dispute but there was no resolution. On April 20, BHMG sued Penske/Variety in L.A. Superior Court alleging it had repudiated their agreement.

On May 1, Penske/Variety filed legal response denying the claims and making counter claims alleging fraud, trademark infringement, unfair competition and other things.

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