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Seagram looks at network
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May 9, 1997: 7:03 a.m. ET
Universal unit wants to acquire the rest of USA Network from Viacom
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NEW YORK (CNNfn) - Seagram Co.'s Universal Studios wants to buy the 50 percent of cable's USA Network that it does not yet own from Viacom Inc.
The move, reported in Friday's Wall Street Journal, would be a change in direction for Universal, which last year looked to sell off its interest in the network.
Seagram sued Viacom in April of 1996, saying that Viacom's Nick at Nite TV Land network violated the partnership agreement between the two companies, which prohibited them from operating or launching entertainment networks which could compete with USA Network.
A chancery court in Delaware is expected to issue a ruling on that suit as soon as next week.
The two companies will probably have to begin a new round of negotiations to end their partnership whatever the judge decides.
Viacom was poised to acquire Seagram's interest in USA Network last year for about $1.45 billion. Seagram was also to have received Viacom's 50 percent interest in the Sci-Fi Channel.
However, a combination of stockholder protest and disagreements over tax issues ended those talks.
Viacom has a high volume of debt, close to $10.6 billion, partially due to the poor performance of its Blockbuster Entertainment unit. It could be looking at a sale of USA Network to help improve its financial picture.
Unloading USA Network would also enable the company to focus on its stronger cable networks, including MTV, Nickelodeon and VH1.
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USA Network
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