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TheStreet.com Pulls Out of Fox TV Show

May 18, 2000|From Bloomberg News

NEW YORK — TheStreet.com Inc., a financial news Web site backed by money manager James Cramer, canceled a weekly TV show on News Corp.'s Fox News Channel after Fox criticized Cramer for his on-air recommendation that investors buy TheStreet.com's depressed shares.

TheStreet.com on Wednesday said Fox News damaged its reputation and breached a contract by "changing a compliance policy" without previous notification.

Fox News, in turn, said TheStreet.com is under contract until May 2001 and has no right to cancel the show. Fox said it's reviewing legal options against the company and Cramer, who owns 3.3 million shares of TheStreet.com.

TheStreet.com officials declined to comment directly on the compliance policy. But they cited an April 26 article in the New York Daily News that said Fox officials were upset after Cramer called TheStreet.com stock "a good buy" on the show that aired April 15.

"We cannot stand by and let a joint venture partner disparage our integrity and impugn our honesty," TheStreet.com Chief Executive Thomas Clarke said in a statement regarding the Fox show decision.

TheStreet.com shares (ticker symbol: TSCM) have been among the biggest losers in the "dot-com" stock plunge. The stock fell from a peak of $48.38 last year to $5.50 recently. On Wednesday, the shares rose 88 cents to $7.94 on Nasdaq.

News Corp. purchased $7.5 million of TheStreet.com stock when it was first sold to the public a year ago, for a 1.6% stake.

TheStreet.com said Wednesday that the cable TV show had limited reach and was inconsistent with a new strategy to attract more users with free news and analysis.

But Fox said it expects the weekly taping to go forward as scheduled and said Cramer is obligated to appear on the program.

"The simple truth is that Mr. Cramer touted TheStreet.com stock in an inappropriate manner on the program," said Dianne Brandi, a vice president for legal affairs with Fox News. "TheStreet.com has put forth the unfathomable claim that a published newspaper article permits Mr. Cramer and TheStreet.com to walk away from his and its obligations."

TheStreet.com Editor in Chief Dave Kansas, in an April 15 column provided by Fox News, also criticized Cramer for promoting the stock.

"I don't like Cramer or anyone else discussing our stock on the show or on the site," Kansas said.

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