DEALING BY LAWSUIT : 4 OF WORLD'S BIGGEST ENTERTAINMENT GROUPS DUKE IT OUT IN COURT.Byline: Farrell Kramer Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. As entertainment executives like Rupert Murdoch know all too well, the key to success in the 1990s is a good eye for new projects, a stable of talented producers and writers, and lawyers. Lots of lawyers. That fact may never have been better demonstrated than Monday, when four of the world's biggest entertainment conglomerates found themselves involved in lawsuits that had landed in court. What happened? By and large, the spectacle stemmed from the desire to push forward deals that had reached some sort of impasse. The day's proceedings involved, directly or indirectly, Time Warner Inc., Murdoch's News Corp., Viacom Inc. and MCA MCA in full Music Corporation of America Entertainment conglomerate. It was founded in Chicago in 1924 by Jules Stein as a talent agency. In the 1960s it bought Decca Records and Universal Pictures, and today it produces films, music, and television shows. Inc. Canada's Seagram Co., which owns 80 percent of MCA, also was among the group. ``Entertainment companies seem to be involved in more litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. than any other field,'' said Robert Friedman, a partner at the law firm of Simpson Thacher & Bartlett. ``I think that's just part of their style in doing business.'' Just why that is the case is as complex as the deals and partnerships that had spawned the day's proceedings. A little background: In the more longstanding of the two rounds of litigation, moviemaker mov·ie·mak·er n. One that makes movies, especially professionally. mov  ie·mak MCA
began by suing Viacom in April over their 50-50 joint ownership of cable TV's USA Network, parent of the USA Network and the Sci-Fi Channel. MCA argued Viacom's ownership of other cable networks like MTV MTV in full Music Television U.S. cable television network, established in 1980 to present videos of musicians and singers performing new rock music. MTV won a wide following among rock-music fans worldwide and greatly affected the popular-music business. and VH-1 violated their partnership agreement. It basically wants to untangle the ownership web, by possibly buying out Viacom's half or selling out itself. Viacom quickly countersued, a nonjury trial started, and after a postponement for settlement talks, which failed, the proceedings resumed Monday. The second round involves Murdoch's News Corp., which sued Time Warner this month, claiming it broke a deal to carry News Corp.'s Fox News Channel on its cable systems. Time Warner denies there was a deal. Fox's suit, which is still pending, brought New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. into the fray with Mayor Rudolph Giuliani saying he would put the new Fox channel on a public access channel the city controls. Time Warner sued the city to stop that, which brought the matter to court. In a daylong hearing Monday, lawyers traded accusations that touched on subjects from political favoritism to corporate profits. At day's end, the dispute was unresolved, and the attorneys were scheduled to return to court today. Not only are the companies involved huge and powerful, the men who run them rank with the best-known and richest in the nation: News Corp. chairman Murdoch, Viacom chairman Sumner Redstone Sumner Murray Redstone (born Sumner Murray Rothstein on May 27 1923 in Boston, Massachusetts) is majority owner and Chairman of the Board of the National Amusements theater chain. Through National Amusements, he is majority owner of Midway Games, Viacom and CBS Corporation. , Time Warner chairman Gerald Levin, Time Warner vice chairman Ted Turner For other persons named Ted Turner, see Ted Turner (disambiguation). Robert Edward Turner III (born November 19 1938 , MCA chairman Frank Biondi Frank J. Biondi, Jr. (born January 9, 1945) is an American businessman. He was born in New York City to Frank Biondi, Sr. and Virginia Willis. He has a Bachelor of Arts degree from Princeton University and an Master of Business Administration degree from Harvard Business School. and Seagram chief executive Edgar Bronfman Two persons are named Edgar Bronfman (father and son). They are the son and grandson of Seagram founder Samuel Bronfman:
MCA's lawsuit against Viacom carries some intrigue of its own. Biondi worked as Redstone's righthand man for a decade before being fired in January. ``I think it's what happens when companies are dominated by wealthy, strong, powerful men who want to get their way,'' said Emanuel Gerard, chairman of Gerard Klauer Mattison & Co., an investment banking and research firm. Entertainment companies seem to have more type-A personalities at the helm than other industries. Whether leaders like Murdoch, Turner, Levin, Biondi and Redstone have shorter fuses than other corporate chieftains or simply run out of negotiating room more quickly, the fact that they end up in court so often says something about the stakes involved. After all, they have to pay the biggest movie stars $20 million just to appear on the screen for them. Production costs for a major motion-picture release can exceed $100 million. ``Litigation is to some extent the ultimate form of negotiation,'' said Steve Fraidin, a partner at the law firm of Fried Frank Harris Shriver shrive v. shrove or shrived, shriv·en or shrived, shriv·ing, shrives v.tr. 1. To hear the confession of and give absolution to (a penitent). 2. & Jacobson. ``I think people anticipate to some degree that all these litigations will actually be settled.'' Though all sidesF are playing their cards close to the vest, the lawsuits would likely go away quickly if the parties get what they want from a business perspective. If Viacom sells out its half of USA Network to MCA, voila voi·là interj. Used to call attention to or express satisfaction with a thing shown or accomplished: Mix the ingredients, chill, and , the MCA lawsuit could quickly be gone. Put Fox News Channel on Time Warner's cable systems and that issue evaporates, too. Of course, if it were that simple it would already be done. Time Warner, no doubt, doesn't like being pushed around by Murdoch - or the mayor of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Fox's new channel badly needs New York, the nation's No. 1 market and home to Madison Avenue Madison Avenue, celebrated street of Manhattan, borough of New York City. It runs from Madison Square (23d St.) to the Madison Bridge over the Harlem River (138th St.). In the 1940s and 50s, some of the major U.S. , where the individuals sit who buy TV air time for advertising. Likewise, Viacom and MCA have been partners in USA Network since 1994, when Viacom acquired its stake by purchasing Paramount Communications. Over all that time, they'd been unable to resolve their differences. This set of lawsuits isn't the first, and will likely not be the last, for the industry. Also, they don't seem to be taken too personally. These companies will do business together in the future, and many are allied even as they sue each other, sometimes for astronomical sums. ``A layman's view,'' offers Jill Krutick, an entertainment analyst at the brokerage firm Smith Barney: ``I suspect that these things will be settled, since it behooves both parties to find amiable solutions and learn how to work together in an increasingly complex world.'' CAPTION(S): 5 Photos Photo: (1) SUMNER REDSTONE Viacom (2) TED TURNER Time Warner (3) GERALD LEVIN Time Warner (4) RUPERT MURDOCH News Corp. (5) Seagrams CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Edgar Bronfman, Jr., center, attorney Ron Olson, left, and attorney Herb Wachtell, right, exit the courthouse after Bronfman's testimony against Viacom Inc. on Monday. |
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