Nesmith Wins $47 Million in Suit Against PBS

Michael Nesmith could soon be back in the business: The former Monkee has been awarded $47 million by a jury in a Los Angeles Federal-court case. The judgment came Tuesday, February 2, after the jury found the Public Broadcasting Service guilty of fraud, breach of contract, and contract interference over a video-distribution deal it signed with Nesmith's now-defunct Pacific Arts Corporation in 1990. Malfeasance by PBS caused the demise of Pacific Arts, jurors decided.

PBS will have to do some heavy damage control in the wake of the verdict. Its noncommercial, highbrow patina has lost considerable shine with the revelation that it back-stabbed Pacific Arts over an arrangement in which PA was to license the PBS trademark, obtain home-video distribution rights from PBS producers, and market the tapes nationwide. According to Bruce Van Dalsem, an attorney for Pacific Arts, Nesmith's company spent $8 million introducing PBS videos into stores throughout the country.

The videos eventually began selling well, but Pacific Arts found it was losing money on the deal. Nesmith decided in 1993 to unload the video library, worth an estimated $15 million, and to use the proceeds to pay off his company's debts. PBS appeared sympathetic and agreed in writing to help recapitalize the business.

However, in a move lifted right out of the Hollywood jungle, the jury found that PBS was covering its backside by secretly negotiating with other distributors. Once a sufficient number of those deals were in place, PBS convinced its producers to terminate their distribution deals with Pacific Arts---which they did, on Columbus Day, 1993.

That date was a federal holiday, and as the termination notices poured in, Pacific Arts found itself unable to seek bankruptcy protection because the courts were closed. Nesmith and what was left of his company were then sued for breach of contract by PBS, stations WNET New York and WGBH Boston, and Children's Television Workshop, which produces Sesame Street.

Nesmith countersued in federal court. The trial lasted one month, and when it was over, the jury found PBS at fault. The presiding judge ordered PBS to pay Pacific Arts' debts to the other plaintiffs. The total judgment of $47 million includes $14.6 million for the loss of the PBS video library, $29.3 million in punitive damages, and $3 million for Nesmith personally.

PBS, which now pulls in $27 million annually from its video-distribution business, will contest the judgment. PBS spokesman Stu Cantor says his organization was "shocked" at the verdict. But according to some critics, the squeaky-clean image enjoyed by PBS is primarily a result of a long, successful public-relations campaign. The PBS acronym is sometimes said to stand for "Petroleum Broadcasting Service" because the nonprofit corporation relies so heavily on funding from the oil industry.

Nesmith is the only one of the four Monkees to have had a real solo career. The musician, writer, comedian, and actor starred in his own Pacific Arts production, Elephant Parts, a groundbreaking music-and-comedy video made in 1981. Pacific Arts is best known for producing the 1984 cult film Repo Man, which starred Emilio Estevez and Harry Dean Stanton. Nesmith's first novel, The Long Sandy Hair of Neftoon Zamora, has just been published by St. Martin's Press.