BUENOS AIRES — Buena Vista Intl. is suing Argentina’s leading broadcaster Telefe for breach of contract for allegedly failing to pay $4 million in license fees under an output deal.
BVI maintains that it has not been paid in six years and that Telefe aired programming and films to which it had no rights at all.
Suit was filed in U.S. District Court in California in June because the 1999 contract between BVI and Telefe established the U.S. as the venue in which to resolve disputes.
Despite the Mouse House’s litigious reputation in other parts, this is the first time BVI has taken legal action in Latin America, said a Disney exec who spoke on condition of anonymity.
BVI has two other Latin American output deals, with TV Azteca in Mexico and with SBT in Brazil. “We have not had one single problem there,” the exec said.
A spokesman for Telefe, a subsid of Spain’s Telefonica group, wasn’t available for comment after repeated phone calls from Daily Variety.
“We definitely understand the hardships and situation Argentina is going through,” the Disney exec said. “We have showed our flexibility and had restructured the deal to Telefe’s benefit twice.”
According to the filing, BVI accepted ad time from May 2002-March 2003 used by another Disney affiliate as a partial payment, which BVI valued at $170,000.
Telefe’s fortunes do appear to be brightening. It’s still the ratings leader, and the company’s financial report shows that it led the 75% increase in peso revenues for its parent’s Argentinean holdings to $36 million during the first half of 2003.