|
Viacom, Seagram talking
|
 |
September 11, 1997: 3:33 p.m. ET
Seek to resolve dispute - before judgedoes - over jointly owned USA Networks
|
NEW YORK (CNNfn) - Viacom Inc. has resumed settlement talks with Seagram Co.'s Universal Studios to end their longstanding dispute over their 50-50 joint venture, the USA Networks.
The new discussions come amid an impending deadline set by Delaware Chancery Court, which is racing with negotiators to resolve the legal battle.
In an exclusive interview, the court's Vice Chancellor Myron Steele told CNNfn he believes "it's wonderful they're talking about settlement but I still have a job to do."
The dispute began when the network's founding partners, Universal Studios and Paramount Communications, were bought in the early part of the decade by their current parent companies, Seagram and Viacom, respectively. USA Networks was founded to be a distribution vehicle for programming created by both Hollywood studios.
In April 1996, Seagram alleged in a lawsuit that Viacom's other television networks (collectively known as the MTV Networks) violated the non-compete clause of the 1981 partnership agreement that established USA Networks.
Last May, Judge Steele ruled that Viacom's other cable assets, indeed, did compete with USA Networks and called for the two parties to resolve their dispute.
When settlement talks failed to bring about an amiable conclusion, Judge Steele informed both parties that he would issue an opinion to resolve the dispute by the end of September.
"My timetable is still in effect," Judge Steele said.
"What they [both sides] know is it's very unlikely that I'll have an opinion until the third week of September or later. I said I would have one by the end of the month," he said.
Until a settlement is presented to the judge, the court would continue to work on an opinion to resolve the dispute, he said.
"If they come to me with a settlement before I have an opinion, the settlement will resolve it. If they don't resolve it, the opinion will resolve it. Whether the parties discuss settlement, it doesn't matter to me," Steele said.
People familiar with the matter said any settlement would likely involve Seagram acquiring Viacom's 50 percent stake in the venture because USA Networks represents Universal Studios' only cable entertainment business.
"There is no reason for Universal to suffer the consequences of selling this essential asset to assist Viacom in curing its breaches," Seagram Chief Financial Officer Robert Matschullat wrote in a letter to Viacom dated June 12.
Analysts have valued the network between $1.5 billion and $1.7 billion -- slightly below Viacom's $1.94 billion bid for Seagram's stake earlier this summer.
-- Robert Liu
|
|
|
|
|
|
USA Network
Viacom
MCA
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
