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'Flip This House' set for court

The show's creator, Richard Davis, claims A&E Networks orally agreed to split revenue with him 50-50.

November 03, 2008|Meg James | James is a Times staff writer.

Despite the mortgage meltdown, there still could be money in house flipping -- or at least in a dispute over a show about house flipping.

A jury trial in Charleston, S.C., begins today to determine whether cable programmer A&E Television Networks must pay a South Carolina real estate broker as much as $30 million for creating the popular get-rich-through-real-estate show "Flip This House."

The idea originated five years ago at the start of the housing boom. Richard C. Davis came up with an idea for a TV show that he called "Worst to First." His pitch: A feisty speculator and his employees buy run-down houses, fix them up, then sell them at a handsome profit.

Davis, who had no background in television, spent $85,000 of his own money to produce a pilot. The A&E cable channel bought the show and launched "Flip This House" in 2005. The so-called docu-soap, which featured Davis and his assistant Ginger, fast became a hit.

But the relationship between the real estate broker and the cable channel just as quickly turned sour. Davis contends that A&E had orally agreed when it bought his idea for "Flip This House" to share half of the show's revenue with him. A&E, in court filings, denies that it ever made such a promise.

The network is owned by Hearst Corp., Walt Disney Co.'s ABC and NBC Universal.

"It has always been understood, and agreed to by all of the parties . . . that A&E Television Networks owns all legal rights in the show and receives and controls all revenue from the show," the network said in response.

A 50-50 split is practically unheard of in the television business, where even the biggest producers are not accorded that large a share of the revenue. Program creators typically receive only a fraction of a show's profit.

It is unclear how much money the show, now in its fourth season, has generated for A&E. Financial details are covered by a confidentiality agreement.

A&E declined to comment.

According to court documents, Davis spent $6 million buying and renovating houses in the Charleston area that were featured in the show's first season.

Davis said he was never paid for his appearances on "Flip This House" nor was he reimbursed for his expenses. A&E said that Davis initially did not seek compensation because he saw the show "as a powerful form of advertising" for his real estate business, Trademark Properties Inc., "which he hoped to expand or franchise on a national basis."

After only 13 episodes, A&E and Davis had a falling out when the two sides attempted to negotiate his participation in a second season. The cable channel drafted a contract for Davis to appear as "on-air talent." He refused to sign and subsequently filed the lawsuit.

A&E switched to a new team of real estate brokers and continued production. "Flip This House" now runs on the weekends.

Davis also found a new buyer. He went into business with A&E's competitor, TLC, where he starred for one season in the show "The Real Deal," which "reveals the true reality of making money in real estate."

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meg.james@latimes.com

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