Talk radio host Adam Carolla in the Infinity radio studios in Hollywood… (Brian Vander Brug/Los Angeles…)
A breach-of-contract suit filed against comedian Adam Carolla by three former business associates suggests that the new media world may not be all that different from old Hollywood.
Producer Donny Misraje -- who claims to have persuaded the radio and television personality and longtime friend to use podcasts to reach his listeners -- filed suit against Carolla on Thursday in Superior Court in Los Angeles.
Misraje is joined in the suit by his wife, Kathee Schneider-Misraje, a creative director, and Sandy Ganz, who helped rebuild and maintain websites for the company's podcasts and co-hosted a show, "CarCast," with Carolla.
The trio allege Carolla failed to distribute their share of the profits in the podcasting business -- or even provide an accurate accounting of the books -- in violation of an oral partnership agreement.
Carolla was at a professional crossroads in February 2009, when CBS Radio canceled his syndicated morning talk show. Misraje claims in the suit that he persuaded his friend of 30 years to reach his listeners via the Internet, and Carolla agreed.
"The Adam Carolla Show" podcast debuted without the personality ever missing a single day "on air," with Misraje taping the first episode using his own equipment, the suit alleges. Carolla's show became wildly popular, with more than 59.5 million downloads from March 2009 through March 2011.
The show was unable to solicit ad revenue without violating terms of Carolla's contract with CBS, which expired on Dec. 30, 2009, so Misraje said he elected to forgo compensation in exchange for an ownership stake in the business, the suit alleged. Carolla received a 70% interest in the venture, while Misraje got a 30% stake, according to court documents.
Ganz began working for "The Adam Carolla Show" in April 2009, and ultimately acquired a 10% interest in the business.
Misraje said he quit his $231,000-a-year job to help Carolla build a podcast network, and his wife began working on the digital venture as well. The couple said they supported themselves by tapping into a $200,000 line of credit on their home equity and depleted the family's health insurance, according to court documents.
"Carolla assured the Misrajes, 'We're taking the gamble together and it will pay off ten-fold in the end,''' the suit alleges.
The digital venture grew throughout 2010, adding eight podcasts to the lineup and live shows on weekends. It began to return profits that year, and by 2011 the profit margin increased by 75%, according to court documents.
As the business began to take off, the suit alleges Carolla elbowed out his partners -- announcing to staff in September 2011 that the Misrajes were "leaving the company," and informing Ganz to stop working on the partnership the following month.
"[Carolla] has since wrongfully 'kicked' plaintiffs out of the business and seeks to exclude them from their share of the partnership profits," the suit alleges. "All the while, he continues to reap the benefits of the business that plaintiffs conceived of and developed."