Panel Awards MovieFone $22.7 Million

A New York arbitration panel has awarded MovieFone Inc. $22.7 million in a dispute with ticketing equipment manufacturer Pacer/Cats. That company’s former assets were purchased from Wembly by Los Angeles-based Ticketmaster Corp.

MovieFone, an 8-year-old New York-based film information line that operates in 30 cities nationwide, initiated the action after what it contends were attempts by those three companies to disrupt its electronic movie ticketing business. Chief Executive Andrew Jarecki estimated that 20% of the company’s revenue comes from ticket sales.

Ticketmaster Chief Executive Fred Rosen said Thursday that Ticketmaster has no liability in the judgment. Ticketmaster acquired all the assets of Pacer/Cats from Wembly between 1994 and 1996, after the assets were transferred to a new company, also known as Pacer/Cats.

“It is our belief and our attorneys’ belief that Ticketmaster Corp. has no responsibility or financial obligation for this judgment,” Rosen said. He contends that the judgment is strictly against the former Pacer/Cats, which is a nonoperating shell held by Britain-based Wembly (which controls London’s Wembly Stadium, among other things).

But Jarecki said that the decision of the arbitration panel clearly holds Ticketmaster liable. Jarecki quoted from the decision: “Wembly, Pacer/Cats and Ticketmaster developed a plan, the aim of which was to terminate the agreement [between MovieFone and Pacer/Cats, made in 1992] and demolish the business.”

A Ticketmaster source said the company--the country’s largest ticketing firm--would go to court rather than pay MovieFone. The amount of the award is based partly on compensating MovieFone for having to invest in developing its own ticketing equipment.

MovieFone shares closed unchanged Wednesday at $7.63 on Nasdaq.