Radio One Files $1.3M Contract-Breach Suit

Story by Inside Radio

Radio One has filed a breach of contract suit in federal court claiming an ad agency stiffed the broadcaster on more than $1.3 million in advertising that ran on its radio stations.

Filed in U.S District Court for the Northeastern District of Illinois, Eastern Division, the suit claims that Direct Media Power Inc. contracted with Radio One to buy about $2 million in commercial airtime for its clients. Radio One says it aired the spots as specified but DMPI shortchanged the broadcaster by the aforementioned amount.

Illinois-based DMPI claims to be the largest broadcast pay-per-call media agency in the nation.

According to the complaint, on June 12, 2013, DMPI COO David DeFranzo signed a confidential credit application with Radio One to purchase airtime. Deal terms stipulated that payments were due 30 days from the invoice date and that DMPI would pay collection costs and legal fees incurred by Radio One if payment wasn’t made in a reasonable period. DMPI immediately began purchasing radio airtime from Radio One to resell to its clients, the suit alleges.

It then claims that Radio One invoiced the agency monthly for its media purchases, which were paid in full until September 2014. The trouble began that October; through the following 12-month period, DMPI bought $1.9 million in airtime from Radio One, the suit says, and the broadcaster issued invoices the month following each purchase. Radio One says it aired the spots for DMPI’s clients, but received only $526,871 of $1.9 million owed. Radio One agreed to $18,821 in billing adjustments for November and December 2015, which still puts the agency on the hook for $1.36 million.

The broadcaster says it has demanded its money but DMPI has refused to pay the balance. The suit, which requests a trial by jury, seeks payment of the balance due, plus interest and collection costs, including legal fees and expenses.