Atlanta-based Cox sues Florida newspaper for giving money to arts center

<p>Cox Enterprises Inc., which owns nearly half of The Daytona Beach News-Journal, has sued the newspaper's board of directors, accusing them of wasting $13 million for naming rights to a community arts center in Daytona Beach.</p><p>The lawsuit seeks to stop the transaction and return the money to the newspaper, or have Cox's ownership share bought out. Atlanta-based Cox also wants unspecified damages and prior approval for any similar deals in the future.</p><p>Cox, which owns 47.5 percent of the News-Journal Corp. but doesn't have a seat on the board, claimed that the deal earlier this year hurt the family controlled newspaper's finances.</p><p>Jonathan Kaney Jr., general counsel for the News-Journal, said the naming rights deal gave the paper enormous promotional benefits and that it would have no adverse effect on the earnings of Cox, which is a publicly traded media company.</p><p>The lawsuit, filed Tuesday in U.S. District Court in Orlando, alleges that the agreement brought "tremendous personal benefit" to Tippen Davidson, president and CEO of the News-Journal Corp., whose family controls the newspaper.</p><p>Davidson and other community leaders have championed the arts center since 1997. A not-for-profit theater founded by Davidson and run by his daughter would be a tenant at the $29 million Lively Arts Center.</p><p>The suit also alleges that several board members of the News-Journal, including Kaney, have also served as officers, directors or employees of the arts center and "could not be independent or objective in analyzing its reasonableness and fairness ... to its minority shareholder."</p><p>Kaney said Cox officials were aware of the News-Journal's arts patronage. He said the newspaper's donation "is a major benefit to the corporation in part and parcel of what we try to be in the community as a good neighbor."</p>