Jim Cornette Files Lawsuit Over Ad Revenue For Podcasts

Jim Cornette has filed a lawsuit against several parties over advertising revenue for his podcasts. PWInsider reports that Cornette and Brian Last’s Arcadian Vanguard LLC filed a lawsuit against Colin Thomson of Kast, Thomson’s wife Christine, his father Rod, his father-in-law Matthew Yu, PodcastOne and LiveOne as well as additional John/Jane Does to be identified over issues they’ve previously publicly talked about, alleging that the parties owe them money from advertising revenue for the podcasts.

The lawsuit, which was filed on January 31st, alleges “the theft of funds by Defendants that rightfully belong to Plaintiffs. While serving as CEO of Kast Media, Inc. (“Kast”), Colin Thomson had access to these funds, which he then diverted for personal benefit and then both held and transferred to others who knew the funds were stolen but accepted them nonetheless. The subsequent conspiracy among the Thomson Defendants, PodcastOne, Inc. (“PodcastOne”), and LiveOne, Inc. (“LiveOne”) not only sought to conceal and retain the misappropriated funds but also deliberately intended to create a state of financial desperation for Plaintiffs. PodcastOne and LiveOne then intended to use this distress to pressure Plaintiffs into signing unfavorable contracts in exchange for partial reimbursement of the stolen funds.”

The suit claims that Thomson’s wife, father and father-in-law received “misappropriated revenue that rightfully belonged to Plaintiffs” and that PodcastOne and LiveOne “knowingly participated in and benefited from Defendants’ schemes and illegal transfer of Plaintiffs’ stolen money. PodCast One engaged in coercive, unlawful and unfair business practices designed to exploit Plaintiffs’ financial distress.”

The complaint reads:

Since 2016, Jim Cornette and Arcadian Vanguard LLC have been equal partners in producing two highly successful weekly podcasts: “The Jim Cornette Experience” and “Jim Cornette’s Drive Thru.”

Mr. Cornette provides his 40+ years of professional wrestling expertise, while Arcadian Vanguard’s Principal Mr. Last handles all production matters and business negotiations through Arcadian.

Mr. Cornette is the “face” of the shows for publicity purposes, while Mr. Last engages outside entities on all technical, financial and other business.

In October 2018, Plaintiffs entered into a Podcast Agreement with Kast Media whereby Kast would serve as Plaintiffs’ advertising agent.

The agreement specified an 80/20 revenue split, with Plaintiffs entitled to receive 80% of advertising revenue and Kast retaining 20% as compensation. This written agreement had a one-year term with a single oneyear renewal option, which was exercised via a September 2019 amendment. The agreement expired by its own terms in 2020, as confirmed by Thomson’s sworn deposition testimony.

As the expiration date of the initial contract was approaching, the parties entered negotiations for a new term agreement, but several obstacles prevented a formal contract from being finalized. One key issue was Plaintiffs’ insistence on including a “key man” clause in the contract, reflecting their unwillingness to be locked into an agreement with individuals or entities they had not specifically chosen to work with from the outset. Plaintiffs made it clear that they wanted to work with Kast Media but were adamant about retaining the ability to opt out of the contract if Kast underwent an ownership change.

After the written agreement expired, the parties continued operating under an implied contract with the identical 80/20 revenue split. All other contract terms continued to be negotiated as part of a process. Under both the written and implied agreements, Kast was responsible for obtaining advertisers, collecting advertising revenue, and remitting Plaintiffs’ 80% share. As documented in emails and confirmed in Thomson’s testimony, he acknowledged this continuing arrangement.

From the outset of the relationship, Thomson caused all payments for the Cornette podcasts to be made either to Brian Last personally, to Last and Cornette jointly, or eventually to Arcadian Vanguard starting in late 2019. Thomson controlled when the payments were sent, to whom and how much.

This payment arrangement is documented through 1099s issued by Kast, physical checks and text messages between Thomson and Last.

Thomson engaged in a systematic practice of factoring all advertising receivables through companies like United Capital Funding and CapChase – including, crucially, Plaintiffs’ 80% share – long before any payment issues emerged.

This practice began while Kast was still making regular payments to Plaintiffs, demonstrating the criminal nature of the enterprise, separate from any later alleged financial difficulties.

Plaintiffs’ 80% share of money paid by advertisers were to be paid to Plaintiffs on “net 30 terms”.

After the “net 30 terms” period had expired, Thomson refactored money that belonged to Plaintiffs.

Thomson has admitted he factored these receivables, including the 80% portion of the two shows’ gross revenues that rightfully belonged to Plaintiffs, while deliberately concealing this practice from them. Thomson had no authority or consent to factor Plaintiffs’ portion of the revenue, yet did so routinely and systematically throughout the relationship.

When Colin personally took possession of the 80% portion of the money belonging to Plaintiffs—knowing it was Plaintiffs’ rightful share, knowing Plaintiffs had not consented, and deliberately concealing this from them—he then wrongfully converted the funds for his own use through the refactoring, he engaged in theft. He withheld the payment beyond the agreed-upon time, failed to remit it as required, and actively concealed these actions from Plaintiffs.

Well before Kast fell behind on payments in 2023, Thomson began factoring the entirety of advertising receivables through companies like United Capital Funding and CapChase- including Plaintiffs’ 80% share – without Plaintiffs’ knowledge or consent.

Thomson has admitted he factored these receivables while deliberately concealing this practice from Plaintiffs.

The factoring of Plaintiffs’ portion of revenue occurred routinely and systematically throughout the business relationship between the parties.

Although Kast occasionally made late payments prior to 2023, it generally fulfilled its payment obligations until January 2023.

After January 2023, Thomson began systematically withholding payments while continuing to collect and factor advertising revenue generated by Plaintiffs’ content

After Plaintiffs confronted Thomson about the missing funds in May 2023, all payments ceased entirely.

The last payment Plaintiffs received was on May 17, 2023.

Through his position at Kast, Thomson methodically diverted revenue that belonged to Plaintiffs through multiple mechanisms.

These mechanisms include factoring arrangements whereby Thomson would factor all receivables, including Plaintiffs’ 80% share, but withhold payment, direct transfers to personal accounts and those of family members, including a documented $176,000 wire transfer to Christine Thomson in October 2021, using factored funds for personal expenses including a Mercedes G-Wagon, Tesla, $10,000 per night suites at the Wynn Las Vegas, and other lavish vacations, and $7,665 in Cartier purchases, as evidenced in Kast’s financial records, deliberately providing false advertising revenue reports to conceal the misappropriation, and operating without proper corporate documentation or authorization for these expenditures and transfers.

Thomson took the fund under his control, and converted it for his own use, sent the money for his own purposes, and transferred the stolen property to others who knew it was stolen.

Thomson distributed these misappropriated funds among his family members, who accepted these transfers with knowledge of their wrongful origin.

Christine Thomson, Colin Thomson’s wife, received substantial portions including at least one documented wire transfer and benefitted from the purchase and sale of a home in California.

Rod Thomson, Colin Thomson’s father, accepted transfers of revenues and/or stock, he knew represented Plaintiffs’ share of advertising revenue;

Matthew Yu, Colin Thomson’s father-in-law, received portions of the misappropriated revenue despite knowledge of its source.

In early 2023, as his scheme began unraveling, Thomson initiated discussions with PodcastOne, a division of LiveOne, about a purchase of Kast Media.

Between March and August 2023, internal records of Kast document that Kast Media had over $11.3 million in liabilities against only $1.7 million in assets.

Also, PodcastOne and LiveOne became aware of approximately $6.9 million in unpaid obligations to podcast creators, such as Plaintiffs, which they knew would make them desperate to be paid money they were owed.

In early 2023, PodcastOne and LiveOne became aware of Thomson’s systematic misappropriation through factoring arrangements.

PodcastOne and LiveOne became aware of Kast’s outstanding debt to Capchase of approximately $1.7 million.

PodcastOne, LiveOne, and Colin Thomson were aware, based on the failed contract negotiations, that Plaintiffs would not willingly agree to sign with PodcastOne and LiveOne. This was known because the inclusion of a key man clause had been a central issue that prevented the execution of a new contract back in 2021 and in 2022.

On May 28, 2023, LiveOne CEO Rob Ellin contacted Mr. Cornette directly, making what Cornette characterized in sworn testimony as veiled threat about bringing PodcastOne into this “fight”.

When Cornette responded detailing Thomson’s misappropriation and refusing to accept PodcastOne stock in lieu of payment, Ellin admitted Kast would soon face bankruptcy, as documented in email exchanges and podcasters would get little to nothing.

Despite full knowledge of Thomson’s conduct, PodcastOne andLiveOne conspired with him to structure transactions specifically designed to:

i. Allow Thomson to avoid paying podcast partners while acquiring valuable shows at a discount; ii. Provide Thomson personal benefit through PodcastOne stock issuance payable after a bankruptcy had concluded iii. Satisfy certain creditors like Brendan Schaub (approximately $1.6 million) while leaving others unpaid; iv. Move assets beyond the reach of legitimate creditors through carefully structured transactions; v. Pay off debts like the CapChase $1.7 million line of credit evidencing some benefit to Podcast One/Live One

PodcastOne and LiveOne knew that Thomson was stealing money from content creators, including Plaintiffs, and used the financial stress and threats of bankruptcy to coerce the podcasters to sign new, less favorable agreements with PodcastOne and LiveOne.

On information and belief, PodcastOne and LiveOne encouraged this conduct, and worked with Colin Thomson to stoke fear in the podcaster, stating they would need to sign with PodcastOne and LiveOne, or get nothing.

The conspiracy was executed through coordinated actions between March and September 2023. Upon information and belief, through present, this includes but is not limited to: abandoning a straight acquisition that would have required assuming Kast’s liabilities; rejecting an asset purchase agreement that would have required disclosure of liabilities; crafting a “finder’s fee agreement” specifically to cherry-pick valuable shows while avoiding liability; issuing PodcastOne stock to Thomson held in escrow for 24 months; and, taking out a $1.7 million loan from Capchase – matching Kast’s debt – while simultaneously issuing stock to satisfy that obligation. The escrow agent for Thomson’s shares was PodcoastOne and LiveOne’s own attorney, Sasha Ablovatskiy.

Rob Ellin, CEO of both PodcastOne and LiveOne, demonstrated the urgency of executing this scheme in emails dated May 30, 2023, pressing for rapid movement of shows “as fast as possible.”

PodcastOne’s CFO Aaron Sullivan admitted in sworn testimony that this urgency was driven by their impending public offering.

The coordination extended to PodcastOne’s hiring of Kast Media’s accountant Michael Calabretta after the scheme was executed.

Cornette and Arcadian have asked for:

“i. For compensatory damages according to proof at trial; ii. For treble damages pursuant to California Penal Code § 496(c); iii. For punitive and exemplary damages pursuant to California Civil Code § 3294 in an amount sufficient to punish Defendants and deter similar conduct, according to proof at trial; iv. For restitution and disgorgement of all ill-gotten gains obtained by Defendants through their unfair business practices; v. For preliminary and permanent injunctive relief: a. Prohibiting Defendants from engaging in similar schemes to defraud podcast content creators; b. Requiring Defendants to implement adequate financial controls and transparency measures; c. Mandating regular compliance reporting to ensure protection of content creator revenue; vi. For attorneys’ fees and costs: a. As provided by California Penal Code § 496(c); b. As a private attorney general under Business & Professions Code § 17200; c. As otherwise provided by law; vii. For prejudgment interest at the maximum legal rate on all amounts awarded; viii. For costs of suit incurred herein; ix. For such other and further relief as the Court may deem just and proper.”