Time Warner Saves Financially-Troubled Apollo Theatre In New Deal

Jet, Sept 6, 1999

In a wide-reaching deal that includes the renewal of a controversial television contract with Inner City Broadcasting, Time Warner recently saved Harlem's financially-troubled Apollo Theatre.

The contract was extended for three years, according to the New York Daily News, after Inner City Chief Percy Sutton agreed to increase his bid for the contract to produce "It's Showtime at the Apollo" to $650,000 a year.

The board of the nonprofit foundation that controls the Apollo, the newspaper reported, approved the contract as part of a settlement that the parties negotiated for weeks.

According to the newspaper, the plan is for Time Warner to play a major role in running the Apollo Theatre in exchange for New York Attorney General Eliot Spitzer dropping a lawsuit alleging financial improprieties by the foundation's board and exonerating its members.

Spitzer reportedly insisted on three conditions to drop his suit: Time Warner gets control of the board; Rep. Charles Rangel (D-NY) step down as chairman and $1 million be paid to the Apollo.

Of those conditions, it was reported that the Apollo board voted to add 10 members who will be selected by the New York media giant.

Rangel will remain on the board but step down as chairman. Veteran actor Ossie Davis will replace him.

Payments to the Apollo will consist of Inner City contributing $150,000 of the total; Western Syndication, Inner City's partner, paying $500,000; Time Warner paying $300,000 and Inner City's law firm, Meyer Suozzi English & Klein, paying $50,000.

"The attorney general has prepared a stipulation which indicates that the entire board, as well as Mr. Sutton, had negotiated in good faith, and [Spitzer] has agreed to move in court for the dismissal of all of the charges," Rangel said in the New York Post.

Time Warner President Richard Parsons denied that the company was taking over the theater, according to The Times-Picayune.

"It's definitely not a takeover," he told the newspaper. "It's a partnership that we're forming between Time Warner and the Apollo Theatre Foundation."

Scott Brown, a Spitzer spokesman, reportedly told the New York Daily News that the state will not ask a judge to withdraw the suit until Rangel actually steps aside as chairman and all the money has been paid.

In a lawsuit filed in November, the State Attorney General's office accused Rangel and five other board members of failing to collect millions of dollars owed to the theater by Inner City.