Brad Smart, who sold his Smart Network – a string of North Queensland stations – to Macquarie Radio Network (MRN, owners of 2GB, 2CH) in 2011 has lodged a claim for $4.1 million in unpaid fees in the Supreme Court of NSW.

The Smart station network, that became Macquarie Regional Radio (MRR) after the sale, is made up of 4VL and Triple CCC FM Charleville, 4HI and 4EM Emerald, 4ZR Roma, 4LM Mount Isa, 4SB Kingaroy and 4DB Queensland.

Reports at the time put the sale price at $6 million. 

In the Statement of Claim obtained by radioinfo and tendered to the court, Mr Smart contends that the bulk of the purchase price due to him was to be paid at the end of the 2013 financial year as calculated on an agreed multiple of the network’s profit for that year. By his calculation that amount should have been in the  vicinity of $4 million.

But when it came to the payout, figures allegedly presented to Mr Smart by MRN for 2013 showed that the network had made a loss and therefore he was not entitled to be paid anything. Sources close to the Smart Network prior to the sale in 2011 say that it had made steady profits while owned by Mr Smart.

In the Statement of Claim, lodged last week, Mr Smart complains of a number of staff and programming costs loaded onto the network from MRN in Sydney that didn’t exist before. 

He also alleges that MRN benefited from advertising sold into programs emanating from 2GB and then broadcast on MRR for which MRR received no payment.

An extract from the Statement of Claim reads:

• Zero cost advertisements are commercial advertising spots, generally of 30 seconds duration, which that MRN directed MRR to schedule and broadcast, but for which MRR received no direct revenue; 
• Embedded spot advertisements are commercial advertising spots which are “embedded” in the syndicated programs originating from 2GB and broadcast on MRR, but for which MRR received no direct revenue; and 
• Embedded live reads are commercial advertisements which are read live by the presenter as part of the syndicated programs originating from 2GB and broadcast on MRR, but for which MRR received no direct revenue. 

These proceedings may make for an interesting first board meeting of the newly merged venture between MRN and Fairfax Radio.

Both Brad Smart and Fairfax Radio’s Adam Lang have declined to comment. MRN’s Russell Tate has yet to respond to our request.