WWF Wins Bid to Dump USA, Join Viacom
World Wrestling Federation Entertainment Inc. said Tuesday it won a contract dispute to jump from USA Networks to Viacom Inc.'s CBS unit.
Delaware Chancery Court Judge William Chandler III ruled that USA Networks didn’t properly match Viacom’s offer of at least $12.6 million for the rights to the WWF top-rated cable television shows, the company said.
“We simply have a better and more comprehensive partnership with Viacom that utilizes all of its media platforms and related companies,” said Linda McMahon, chief executive officer of WWFE.
The ruling is a victory for Viacom, which expects to use wrestling to revive its ailing TNN network.
Analysts predict that, without wrestling, USA will fall from the top five cable channels ranked by ratings, ultimately forcing down its advertising rates. USA has failed to develop other original programming as popular as wrestling, giving it few other programs on which to promote the network.
WWF and Viacom said they have agreed to a five-year partnership that will include airing such shows as “Raw is War,” “Livewire” and “WWF SmackDown.”
Viacom’s offer included a five-fold increase in USA’s $100,000 weekly payments to WWF, $3.5 million for seven annual WWF television specials, more than $1.1 million for a new TV series and movies about wrestling and $8 million in fees for transferring the shows to the Nashville Network, according to court papers.
Separately, WWF said fourth-quarter profit fell amid a barrage of legal fees and start-up costs from a foray into football. But WWF still exceeded analysts’ estimates, reporting net income of $12.8 million, or 19 cents a share for the quarter ended April 30, down from $13.1 million or 23 cents the year before. Revenue climbed to $116.4 million from $93.8 million in the fourth quarter. Shares rose $1.06 to close at $18.06 on Nasdaq.