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PENGUINS, FOX TRADE BARBS OVER IMPENDING TV RIGHTS SUIT
Published April 23, 1998
The Penguins and Fox Sports Pittsburgh (FSP) execs "are bulking up for a postseason brawl over broadcasting rights," according to Jon Schmitz of the PITTSBURGH POST-GAZETTE. In a court document filed this week, the Penguins "accused Fox of trying to defraud the team and the [NHL] of fees owed for TV rights." Fox officials contend the Penguins are trying to break a contract that gives FSP broadcast rights to Penguins games through the 2008-09 season in order to form their own network, Marino Sports Network. Fox Sports Senior VP/Media Relations Vince Wladika said that the net "felt betrayed" by the Penguins "after bailing the team out of financial binds on several occasions in recent years." Wladika said that FSP "lent" the Penguins $11M in '94, "helped arrange" a $31M loan from Bank of America to the team in '95, and guaranteed a $5M loan in '96 when the Penguins "lacked the credit-worthiness." Wladika said that the team's "financial situation was in such disarray that the network sent its payments for rights fees directly to the bank rather than to the Penguins." In the court document, the Penguins alleged Fox "intentionally" and "deceitfully" underreported the numbers of outer market subscribers to minimize fees it owed. Fox puts the amount in dispute at less than $600,000, but Penguins Dir of Business Development Bill Craig, a former FSP exec, said the fee owed by Fox "might be twice" that. Wladika: "Not even remotely true." As for the loans to the team, Craig said they were "cold, hard" business deals: "Fox is not noted for being in the social welfare business. To portray this as some benevolent act on their part is absurd" (PITTSBURGH POST-GAZETTE, 4/22). The case is scheduled for trial June 29 (David Brown, Pittsburgh TRIBUNE-REVIEW, 4/22).