ABC Radio Loses $20-Million Lawsuit to Former Partner

Walt Disney Co.’s ABC Radio Networks lost a $20-million breach-of-contract verdict after a jury decided that the network misappropriated the design of a children’s radio service from its onetime partner.

A nine-member federal court jury in Minneapolis ruled in favor of Children’s Broadcasting Corp., which sued ABC two years ago, accusing it of abandoning a strategic alliance and then using what it learned to launch Radio Disney.

“It’s great to be vindicated,” said Children’s Broadcasting Chief Executive Christopher Dahl. “Might doesn’t make right.”

Disney is the second-largest U.S. media company.

Children’s Broadcasting argued during the four-week trial that ABC had planned to abandon the alliance only a month into it but kept the partnership going until it learned enough to compete.