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Diller to match Viacom offer for cable

Move surprises industry insiders

NEW YORK — Going to the mat over top-rated wrestling, Barry Diller’s USA Networks plans to match an offer by Viacom/CBS for cable rights to the World Wrestling Federation, perhaps as early as today.

Most industry insiders had expected Diller to back down as the giant Viacom/CBS offer reportedly included perks like airing the WWF’s new football league games, set to begin in February, on UPN on Wednesday nights, ads on MTV and overall benefits of the combined companies’ wide presence across TV, radio and billboards.

That’s hard to put a dollar value on and could lead to a court battle and raise the question of what matching rights mean in today’s world of giant congloms.

“That’s where it comes down to who has better lawyers and how well the original (USA/WWF) contract was written” from USA’s point of view, said one Wall Streeter.

Diller theoretically could put the Sci-Fi Channel, and a range of Internet and other assets at the WWF’s disposal, although nothing on the scale of a Viacom/CBS.

In fact, USA execs have appeared lately to be preparing for the loss of the franchise, reassuring Wall Street that the company’s financial health does not depend on the WWF and that losing it would be much more of a public relations than a cash-flow problem.

UPN already broadcasts WWF’s “Smackdown” on Thursdays and Diller’s offer wouldn’t necessarily impact that.

USA Network has five hours a week of WWF programming, including “Raw Is War” on Monday nights, the top-rated show on basic cable. The Sunday 7 p.m. WWF bouts are a key lead-in to USA’s block of original programming, but execs have said wrestling audiences are among TV’s least sticky — they tend to tune in for wrestling and don’t hang around afterwards.

They’ve also noted that the WWF controls some 85% of its own ad inventory, so the hit to ad revenue if the programming disappeared would be much less than might have been expected.

Apparently, however, the company considers the knock-down, drag-out histrionics that captivate American males worth fighting for.

Diller and Viacom chief Sumner Redstone faced off before in the epic battle for Paramount in the early 1990s.

Insiders have said Diller might counter Viacom/CBS by offering to put football games of the XFL (in which NBC recently became part owner) on USA on Wednesday, but would then somehow have to make up in cash the difference between USA’s 77 million viewers and UPN’s 84 million.

USA stock slipped 4.9% to $21.82 on Tuesday in rocky financial markets and amid growing concern that the USA Network cable net may lose WWF programming.

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