Radio Company Sues Competitor

[radiofan]

Radio company sues competitor
Citadel Broadcasting accuses former executive and other ex-employees of stealing company information
By Ken Dey - kdey@idahostatesman.com
Edition Date: 05/15/07

A Boise radio war is being waged in federal court.
Citadel Broadcasting Co., which owns six radio stations in Boise, says the chief executive of Peak Broadcasting, a former Citadel executive, and four other former Citadel employees now working for Peak stole confidential information from the company.

Peak is a new player in the Boise radio market. In March, Peak bought six former Clear Channel Communications stations in Boise as Clear Channel dumped small-market stations nationwide. Several of the stations have formats that compete directly with the Citadel stations.

Since then, three Citadel managers based in Boise and a Colorado-based executive have resigned to take positions with Fresno, Calif.-based Peak.

In a lawsuit filed last month, Citadel alleges that Peak CEO Todd Lawley "initiated a scheme to raid the ranks of Citadel Broadcasting employees (and, thereby, cripple Citadel Broadcasting in a host of markets) by recruiting and luring away key employees and managers."

One manager took a disk from a Citadel computer that contained customer and market data, plans, projects, revenues, expenses and promotional materials as well as monthly sales goals, plans, projections and results, Citadel says.

Citadel said such information in the hands of competitors would be "devastating" to the company.

In a response filed last week, Peak denies the allegations and said the defendants did nothing unlawful and any infor-mation they obtained was readily available in the public domain.

Attorneys for both companies were not immediately available for comment Monday.

Lawley, a former regional president with Citadel and the company's third-highest executive, resigned in November to become CEO of Peak. The two companies have the two highest-rated stations in the market for listeners 12 and older. Peak's Mix 106 (KCIX-FM) was No. 1, followed by Citadel's KBOI-AM. Citadel also has the top-rated country station, Kissin 92 (KIZN-FM), and the top rock station, The Eagle (KKGL-FM).

Peak also bought Clear Channel stations in Fresno that Citadel was vying for. Citadel alleges Lawley used inside information from Citadel to compete for the Fresno stations.

The other defendants include:

• Kevin Godwin, former regional manager for Citadel, who the company says oversaw the Pacific Northwest Region including Colorado, Idaho and Utah. Godwin, who was based in Colorado, quit Citadel on March 16 to join Peak. Citadel says he irretrievably deleted Citadel data from a Citadel laptop computer. He's also accused of trying to recruit Citadel account executives.

• Michael Owens, the former general manager for Citadel's Boise stations. Citadel alleges Owens, of Eagle, left the company with the disc of company information, the lawsuit says. Peak says the disc contained only Owens' personal items. Owens resigned from Citadel on March 18.

• Michael Sutton, the former general sales manager for Citadel's Boise stations, also resigned March 18. Sutton, of Meridian, was part of the "scheme and conspiracy" against Citadel, the lawsuit said.

Citadel said it negotiated with Owens and Sutton to stay with the company. Citadel claims it reached agreements to give Owens a 29 percent raise and Sutton a 36 percent raise, but the two left anyway.

Peak says no agreement was reached.

• Rick Sutherlin, who is also known as Rick Stewart, was hired by Owens Feb. 26 to be the new program manager of Citadel's Boise country station, KQFC-FM. Sutherlin's first day was to be on March 19, but Owens allowed him to start work a week earlier. Citadel said he had access to the station's information including its play lists, marketing plans and strategic goals. Citadel says Sutherlin didn't return to work March 19.The company alleges that during the week of March 12, Sutherlin secretly traveled to Fresno to meet with Lawley.

Citadel is requesting compensatory damages in an amount to be decided at a jury trial, but that would exceed $10,000. The company is also asking for an award of any profits from Peak that were received because of the company's use of Citadel information. The company wants a permanent injunction against Peak and its employees from using any information obtained from Citadel.

The lawsuit began in Ada County District Court in Boise and was transferred this month to U.S. District Court in Boise.

No trial date has been set.

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