SBD/23/Sports Media

PENGUINS, FOX TRADE BARBS OVER IMPENDING TV RIGHTS SUIT

          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). 

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