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).
