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MCA’s expert witness in Viacom suit thrown out

NEW YORK – The Seagram Co. suffered a black eye Friday in its lawsuit against Viacom Inc. when its expert witness was thrown out of court for embellishing his qualifications.

The setback came in the last day of testimony in Delaware Chancery Court, where the TV Land-USA Network brawl has been raging since Oct. 28. Following cross examination by Viacom attorneys from the firm Skadden Arps Slate Meagher & Flom, Judge Myron Steele disqualified Andrew M. Rosenfield as an expert witness for Seagram’s MCA Inc. unit.

After inconsistencies were revealed about Rosenfield’s credentials in the field of economics, Steele declared, “The witness has taken the credibility test and failed.”

A graduate of the U. of Chicago Law School, Rosenfield is president of Lexicon Inc., a Chicago-based consulting firm specializing in economics. He earned a master’s degree in city and regional planning from Harvard’s School of Design in 1978. Since 1982, this degree has been granted by Harvard’s prestigious John F. Kennedy School of Government.

Viacom’s attorneys found that Rosenfield submitted resumes and testified in previous court cases that he held a master’s degree in economics from the Kennedy School and that he had been close to earning a Ph.D. in economics from the U. of Chicago before transferring to its law school. When asked about his educational background, Rosenfield demonstrated “a remarkable lack of candor,” Judge Steele said.

Steele’s decision to dismiss Rosenfield capped more than a month of testimony in the dispute between Viacom and Seagram’s MCA unit. MCA sued Viacom April 29, charging that Viacom was failing to comply with the companies’ USA Networks partnership agreement by launching the TV Land network, a spinoff of Nickelodeon. MCA and Viacom subsid Paramount each own 50% of USA Networks (Viacom acquired Paramount Communications Inc. in 1994, and hence its USA stake). MCA contends the agreement prevents either side from launching a cable network outside the partnership. Viacom has argued that MCA’s suit is a pretext to force Viacom to sell its stake in USA to MCA.

Hired gun

Rosenfield was hired by MCA to counter arguments by Viacom witness Robert Willig, a Princeton U. economics professor who testified that enforcing the non-compete provision in the USA Networks agreement would violate antitrust laws.

Viacom Inc. chairman Sumner Redstone and Seagram Co. CEO Edgar Bronfman Jr. frequently contradicted each other during their testimony in the suit. In one of the most surprising admissions of the trial, Bronfman stated that during negotiations held Feb. 12 with Viacom, he let Viacom deputy chairman Philippe Dauman substitute MTV for TV Land in a verbal summation of an understanding the two companies reached. Bronfman said he did not correct Dauman. The Seagram CEO said he did not understand that MTV Networks was the umbrella group for all of Viacom’s cable networks.

Redstone said he would like Seagram to honor the agreement that Bronfman reached with Viacom on Feb. 12, which would have allowed Viacom to continue operating its existing cable networks, which include TV Land, and keep its stake in USA in exchange for allowing former Viacom CEO Frank Biondi to work for MCA.

Disputing both sides

Seagram had been trying to hire Biondi (who had been fired by Redstone in January) but was unable to because of a non-compete clause. In April, Redstone did an about-face and allowed Biondi to become CEO of MCA Inc. by releasing Biondi from the non-compete. Biondi subsequently became a witness in the TV Land suit, in testimony that disputed some of Redstone’s claims as well as some of the claims by MCA.

Friday marked the wrap of testimony; however, no decision in the case is expected for at least 90 days. Seagram had no comment on the loss of its expert witness.

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