(Photo by Apu Gomes/Getty Images)
Elon Musk bought himself yet another legal headache today in the form of a breach of contract suit filed by former CNN anchor Don Lemon in California Superior Court.
After weeks of hyping Lemon’s new show on X-Twitter, the inaugural broadcast on March 8, 2024 featured an interview with the petulant billionaire himself. Musk was visibly uncomfortable with pointed questions about his drug use and apparent endorsement of antisemitic conspiracy theories and about the growth of hate speech on the platform.
“I don’t have to answer questions from reporters, Don,” he said testily. “The only reason I’m doing this interview is because you’re on the X platform and you asked for it. Otherwise, I would not do this interview.”
After the show, Musk texted Lemon’s agent “contract [with Defendants] is cancelled.” Which would appear to acknowledge the existence of a contract, although X-Twitter refused to pay Lemon on the theory that no such contract existed.
According to the complaint, the company aggressively courted Lemon in 2023 as advertisers fled the site in the wake of Musk’s erratic behavior, the disastrous rollout of Twitter Blue, and the uptick in offensive content.
“Defendants sought to affiliate with reputable figures whose name, likeness, identity, and reputation they could use to piggyback off of to retain advertisers,” he wrote. “Lemon was a top prospect. A gay, Black man with an excellent reputation and a household name, he was the perfect candidate to partner with to aid their dying advertisement revenue.”
Lemon and his agent were in regular communication with CEO Linda Yaccarino and Head of Content Brett Weitz in December of 2023 and January of 2024.
“You’re set up for a lot of $$ this year” Weitz texted Lemon on December 30. “You’re gonna make money faster than you think!”
“My job is to make sure that you feel like you’re in good company on the platform and I’m gonna do everything in my power to make sure that happens. This will be an awesome adventure for both of us,” Yaccarino wrote on January 6.
They hammered out the details of the agreement in detail, with $1.5 million base compensation for four long and ten short pieces per month, with ad revenue sharing and specific incentives for reaching subscriber thresholds (“$250,000 for reaching 4 million followers, $500,000 for reaching 6 million followers, $750,000 for reaching 8 million followers, and $1,000,000 for reaching 10 million followers”).
Despite having no written contract — really? REALLY? — Lemon duly showed up at a the Consumer Electronics Show in Las Vegas on January 9, where he appeared alongside Yaccarino as she worked the room trying to convince advertisers that X-Twitter was a stable platform to promote their brands. Lemon also hired producers, built a studio, and established the infrastructure to run a media business as per the negotiated agreement. And all the while, X-Twitter publicly promoted the partnership using Lemon’s name and likeness, piggybacking off the goodwill he had accumulated over decades in mainstream journalism. But after the disastrous March 8 interview, it all fell apart.
According to Lemon’s complaint, “Weitz spoke with Lemon by phone and told Lemon that Defendants were not going to pay him or follow through with the promises and representations made to him because there was no signed agreement, despite Musk previously representing to Lemon that there would be no need for a formal written agreement or to ‘fill out paperwork.’”
Interestingly, Lemon alleges that the company never intended to go through with the deal.
Defendants never intended to fulfill their representations and promises to Lemon. Instead, at a time when Defendants were under intense criticism and losing advertisers, Defendants only intended to publicize a partnership between X and Lemon, and thereby associate and promote the X brand with Lemon’s good name, likeness, identity, and revered reputation, in order to: (a) rehabilitate Defendants’ reputation; (b) promote the partnership and their association with Lemon on Defendants’ website (www.x.com), social media accounts, at promotional events, and elsewhere to sell advertisers on the X platform; and (c) otherwise profit and gain advantage commercially.
In potentially related news, California Civil Code § 3294 allows for punitive damages in cases of oppression, fraud, or malice.
The complaint alleges fraud, breach of contract, misappropriation of likeness, and unjust enrichment. Lemon demands a jury trial and unspecified damages.
“This case is straightforward. X’s executives used Don to prop up their advertising sales pitch, then canceled their partnership and dragged Don’s name through the mud,” his lawyer Carney Shegerian said in a statement provided to ATL. “You don’t have to be a genius to see the fraud, negligence, and reputational damage here. Don’s a hard-hitting journalist who’s committed to defending his good name. We look forward to our day in court.”
Meanwhile, New York Times tech reporter Kate Conger is out with a brutal profile on Yaccarino this week in which she reports that X-Twitter’s ad revenue continues to tank:
X executives told employees last month that 65 percent of advertisers had reactivated their campaigns, although they appeared to be spending less than they once did. Internal documents obtained by The New York Times show that, in the second quarter of this year, X earned $114 million in revenue in the United States, a 25 percent decline from the first quarter and a 53 percent decline from the previous year. The company aims to reach $190 million in U.S. revenue during the third quarter, bolstered by advertising associated with the Olympics, football and political campaigns, the documents said — but that target would still set the company’s quarterly earnings at 25 percent less than they were last year.
Luckily Elon Musk is a genius who has a plan to turn this thing around pronto. Just ask his blue check reply guys, they’ll tell you!
Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.
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