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Viacom, CBS settle fee feud

CBS and Viacom Intl. have settled all pending litigation between them over payments due for distribution of certain TV programs owned by the network.

The settlement, via a lump-sum payment, stems from a 1984 suit filed by CBS regarding money allegedly owed from domestic syndication and international distribution of such shows as “I Love Lucy,””The Honeymooners” and “The Twilight Zone”– all of which were produced by the network and distributed by Viacom.

Terms of the resolution weren’t disclosed, but CBS estimated that the one-time settlement payment will increase its 1993 third-quarter earnings by approximately $ 1.15 per share on a post-tax basis. Based on recent quarterly reports, that would compute to somewhere around $ 18 million.

In a statement, Viacom said it has maintained a reserve covering all issues surrounding the litigation and that the settlement won’t affect its earnings. The company added that the agreement “provides for Viacom to acquire certain additional rights to CBS programs” and that it “looks forward to working with CBS and strengthening the relationship between the two companies.”

Viacom was spun off from CBS after implementation of the financial interest and syndication rulesin 1970, requiring the networks to divest the portion of their business involved in syndication. The disputes subsequently arose over what was owed to CBS based on accounting practices and new technology, which weren’t a factor at the time the rules were written.

Although fin-syn constraints have been relaxed significantly, recent changes in the rules still dictate that the networks must rely on a third party in terms of domestic distribution while freeing them to produce and own the primetime programs they broadcast.

CBS has a production role in seven series for the coming season, although several are being made in partnership with companies that will handle their domestic distribution.

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