George Steinbrenner sued over Yankees' TV network

(Agencies)
Updated: 2009-08-29 11:28

NEW YORK (Reuters) - George Steinbrenner, longtime owner of the New York Yankees baseball team, was accused in a lawsuit on Friday of fraud and breaching an agreement over the running of his $3 billion cable TV network.

In a lawsuit filed in Manhattan federal court, Robert Gutkowski, a former president of Madison Square Garden Corp and the MSG Network, contended that he came up in 1996 with the idea for what became the Yankees Entertainment and Sports Network, or YES Network, six years before its debut.

According to the lawsuit, Steinbrenner "knowingly lied" in promising Gutkowski a chance to build and have a major role in running the network.

Instead, Steinbrenner retained Gutkowski as only an occasional outside consultant, and discussions about making Gutkowski chief executive never panned out, the lawsuit claimed.

Gutkowski is seeking to recover at least $43 million, including $23 million of compensatory damages and $20 million of punitive damages, court papers show. Steinbrenner owns about 30 percent of the YES Network, it said.

Howard Rubinstein, Steinbrenner's spokesman, called Gutkowski's allegations "patently false and frivolous."

He said Gutkowski has nothing to do with the idea for a regional sports network, and had no role in establishing and was never promised a high-level position at the YES Network.

A Yankees spokesman declined to comment.

Steinbrenner's health has declined in recent years. Now 79, he handed control of the Yankees last November to his son Hal, ending an often tempestuous 35-year reign over baseball's most storied franchise that earned him the nickname "The Boss."

The YES Network serves about 7.5 million households in New York, Connecticut, New Jersey and Connecticut, and also broadcasts New Jersey Nets basketball games.

The MSG Network had held local broadcast and cable rights to Yankees games from 1989 to 2000. Gutkowski later founded and became chief executive of Marketing Group International, a sports and entertainment business consultant.

The case is Gutkowski v. Steinbrenner, U.S. District Court, Southern District of New York (Manhattan), No. 09-7535.