Arbitrator James Lynch yesterday ended a "long-running"
dispute between the Red Sox, Bruins and Viacom, the three
entities which own the New England Sports Network (NESN),
when he ruled that the two teams "are entitled to full
revenue shares" from NESN, "regardless of whether viewers
receive" the channel as a basic cable service or premium
programming, according to Gregg Krupa of the BOSTON GLOBE.
The ruling assures that the teams will share "about" $15M in
revenue from broadcast rights between now and 2002, although
that estimate is "based on a number of volatile factors,
including viewership rates and the organization of the
regional cable [TV] industry." The dispute concerned what
percentage of cable subscribers' fees were due to the teams,
as in recent years NESN has moved from a mostly pay service
to a predominately basic service. The teams argued that
despite the shift, their fees should not be decreased, a
claim which "spurred a lawsuit by Viacom," which resulted in
yesterday's decision. Krupa writes that the ruling was "a
defeat" for Viacom, which is left "with a holding that will
produce little if any revenue" (BOSTON GLOBE, 7/28).
FOR SALE? Krupa reports that some sources at NESN and
at its "potential competitors," FSNE and ESPN, "speculated"
that the decision will "lead eventually" to NESN's sale, as
Viacom's "diminished interest" in the channel "is clear."
In addition, although the decision "means more money" for
the Red Sox and Bruins, NESN "itself is likely to become
less profitable" as a result (BOSTON GLOBE, 7/28).
