Scott Crystal, who was just replaced as TV Guide’s president and CEO, is accusing the magazine’s private equity firm owners of raiding the company and hastening its decline.
Crystal and the company called his departure a resignation. Michael Clayton vp, general manager there, was appointed to fill his shoes.
Crystal said in a phone interview that he has filed legal notice that he’s preparing to sue Open Gate Capital for breach of contract.
“It’s unconscionable,” Crystal said. “They’re putting the business at risk by hastening the reduction of cash from a business that’s losing money. I filed suit to stop them from doing so.”
In an e-mail sent today to TV Guide’s staff, Crystal wrote that as CEO, his responsibility was to “not allow the ongoing raids of our corporate cash balances by Open Gate.”
“With hundreds of thousands of dollars from TV Guide's bank accounts squandered on Open Gate ‘costs and expenses’ for non-existent and non-requested ‘consulting and advisory services,’ my continued attempts to thwart Open Gate were increasingly unsuccessful going back to March of this year when, as many of you know, I successfully opposed their demand for these payments and refused to authorize their monthly checks,” Crystal wrote in the e-mail.
“These fundamental differences of opinion -- enrichment of the franchise versus self-enrichment of the owners -- have made it untenable for me to continue as president and CEO,” Crystal continued.
Open Publishing, as the parent company of TV Guide is called, called Crystal’s statements inaccurate and said it has acted appropriately in running the company, which it acquired in December 2008.
“Mr. Crystal chose to resign rather than work with new management,” read a statement provided by a company rep. “As the 100 percent owner of TV Guide magazine, Open Publishing is fully committed to making TV Guide magazine a successful and profitable company, as already evidenced by a profitable first quarter in 2009.”
The iconic entertainment magazine has been on a roller-coaster of a ride, operating under three different owners in the past year while fighting to regain profitability amid one of the most punishing ad climates in decades.
In recent months, the magazine has cut staff, trimmed its rate base 9.4 percent to 2.9 million from 3.2 million (after a two-thirds reduction back in 2005 when the magazine was converted to a full-sized from a digest format) and reduced its frequency to six fewer issues this year, for a total of 40.