|Mark Burnett and rival Madison Road have ended their legal battle.
MARK BURNETT COUNTERSUED BY COMPETITOR
Battle for Product Placement Profits Gets Nasty
As part of the settlement, the two companies will co-produce a yet-to-be-determined reality series, which could involve the integration of brands within the program, and Madison Road will also work with Mark Burnett Productions to attract and build tasks around brands for “at least two episodes” of The Apprentice 5 on a non-exclusive basis.
The companies, based in Los Angeles, agreed to dismiss the lawsuits each had filed against the other in March.
In their best interests
“We got to know one another and discovered that it was in our best interests to keep working together and, in fact, to expand the relationship to develop a new show together” Mark Burnett said in a statement. “Branded entertainment has become such a growth industry, it makes sense for us to be in business with Madison Road.”
"When people get down to trying to understand the goals, they start realizing that there are synergies to what we're trying to do," Madison Road's CEO, Jak Severson, said. "We share a lot of common alliances that would benefit everybody if we just try to work together."
The settlement ends what had escalated into a contentious relationship between Mark Burnett Productions and Madison Road -– one that threatened to alienate advertisers interested in spending more of their marketing dollars to integrate their products in TV shows.
In Mr. Burnett’s lawsuit, the producer claimed that Madison Road duped advertisers into overpaying for brand-integration deals in The Apprentice and fraudulently represented itself as the exclusive agent for brand-integration deals for the show. It also alleged that Madison Road charged advertisers up to 250% more for those deals than Burnett was asking, and then skimmed off the difference. Madison Road had brokered deals to have tasks built around Levi Strauss & Co., Procter & Gamble Co. and M&M Mars’ products.
Charges of 'quashing the competition'
Meanwhile, Madison Road hit back hard, claiming defamation damages of $20 million, and blasted the uber-producer for making false accusations in an attempt to "quash the competition" in the branded-entertainment business and accused Mr. Burnett of "sheer greed, arrogance" and for "emulating the conniving, unethical and devious behavior that often leads to success for his reality show contestants." The company claimed that Mr. Burnett’s company tried to hike sponsorship fees "as high as $5 million for a task."
Things are apparently different now. "We're very friendly," Mr. Severson said. "There wasn't a lot of attention paid to the facts early on, but the right step was taken. We went through our businesses and our mutual objectives and determined that there were a lot of goals that we share. Advertisers are clamoring for a way to be more releavant to audiences and touch them. What we've seen in the last year, and certainly with Mark's shows, is that when done correctly there's an infinite amount of new value that can be created."
Pricing issues remain
However, the settlement still doesn’t put to rest any issues the lawsuits raised: Marketers are uncomfortable with the lack of clear pricing models for brand integration and are beginning to feel fleeced when it comes to how much they’re being charged. Meanwhile, TV networks are starting to demand more of the integration fees producers are collecting.
Either way, the agreement to co-produce a new reality show comes as Madison Road is in the midst of expanding from a broker of branded entertainment deals to a producer of programming. The company has several shows in development, but the first to make it to air will be the reality series Treasure Hunters for NBC, a co-production with Ron Howard and Brian Grazer’s Imagine Television and Magical Elves.
“Mark Burnett knows how to make great television”, Mr. Severson said. “The networks, studios, audiences and advertisers will all benefit by our working together to improve many aspects of today’s changing TV model.”
Mr. Burnett’s The Apprentice 3 wrapped last week and the finale for The Contender will take place May 24 in Las Vegas. The producer’s Rock Star: INXS premieres July 11 on CBS.