With football season upon us, following lawsuits might not be top of mind for you. That means you probably are not following Susquehanna Radio LLC v. Jacob Kemp and Dan McDowell in the United States District Court of the Northern District of Texas. I’m not suggesting it’s Brown v. Board of Education or Sullivan v. The New York Times, but it could be worth watching for everyone in our industry. The implications of any decision in this case might impact radio talent nationwide.
The background in the case is this: Kemp and McDowell left Cumulus powerhouse 96.7/1310 The Ticket in Dallas after the expiration of their contract. They chose to launch their own digital platform and began producing and distributing content. That immediately elicited the attention of the Cumulus legal department which is why the lawsuit was filed in Dallas court.
Simply put, Kemp and McDowell will argue a digital platform is non-competitive, based on the non-compete language in their contract, with terrestrial radio. Cumulus argues there is no distinction between terrestrial radio and a digital platform as it pertains to producing content with the desire to secure advertising dollars. It would be up to a Dallas judge to weigh the merits of that argument, assuming it ever gets that far down the road.
That is an assumption one shouldn’t make. Many people in the broadcast industry have left one company to work for another company that operates in a competitive manner. Though the contracts spell out, normally in the broadest manner, the issues with that, precious few of these cases actually see the light of a courtroom. That leaves us without much legal precedent on how enforceable a no-compete clause is as it pertains to talent fleeing terrestrial radio for a digital platform. For that reason, this case should be one of great interest to anyone considering that move.
Kemp and McDowell aren’t the first to leave Cumulus and attempt this transition. In fact, my show did the very same thing in 2021. Fortunately, we avoided any lawsuits or courtroom appearances. One could not think, though, Cumulus would stand by and allow talent to keep attempting this without trying to make a statement. The statement is that Cumulus is willing to use the force of their legal power to protect what they see as their business interests.
With that in mind, the other side of the coin exists. Cumulus, or any other media group, could ill afford a judge ruling against the enforceability of their no-compete clauses. A negative ruling on the record could open the flood gates of a talent exodus. Cumulus has really good attorneys who are well aware of this, which is why I would doubt this lawsuit makes a courtroom appearance. A negotiated settlement seems far more likely. It saves Kemp and McDowell money and heartache and saves Cumulus the possibility of a stinging defeat.
The other option would be that Kemp and McDowell want to strike a blow in favor of all in the radio industry. This would be a gamble, an expensive gamble. That is exactly what large media companies count on; even if an attorney tells you your case is a solid one, he does not work for free. Add to that the potential of paying court costs for both parties and most people don’t have the constitution for that type of battle.
Major media corporations absolutely know what they are doing when they have you sign post contractual restrictions. They are often written broadly enough that you’d convince yourself you couldn’t even go flip burgers without being sued. The corporations count on that fear to keep you employed as long as they have need for you. That is why this case is critical to many in our industry.
We are still in an era in which many contracts don’t even address digital media in their non-competes. Trust me, that is quickly changing. Contract by contract, media groups are doing all they can to protect their spot in the digital space. Until your next contract addresses that, the way a Dallas judge addresses that could be of massive consequence to you. If the gavel ever falls in this case, the industry could change forever.
Ryan Brown is a columnist for Barrett Sports Media, and a co-host of the popular sports audio/video show ‘The Next Round’ formerly known as JOX Roundtable, which previously aired on WJOX in Birmingham. You can find him on Twitter @RyanBrownLive and follow his show @NextRoundLive.
