MCA, Viacom Hold Settlement Negotiations - WILMINGTON, Del. (AP) -- MCA Inc.

WILMINGTON, Del. (AP) -- MCA Inc.'s and Viacom Inc.'s trial over their joint cable venture, USA Network, was suspended Monday amid ...

WILMINGTON, Del. (AP) -- MCA Inc.'s and Viacom Inc.'s trial over their joint cable venture, USA Network, was suspended Monday amid settlement negotiations.
Sources for both sides said the trial in Delaware Chancery Court was adjourned until Thursday to allow for private talks. If no agreement was reached, the trial would resume where it left off, said the sources, who spoke on condition of anonymity.



"This hiatus is to permit parties to discuss resolution (of the dispute). There's been some progress on that," said a source familiar with the negotiations.

Meanwhile, the New York Times reported in Tuesday's editions that Viacom is close to a deal with MCA in which Viacom would pay $1.45 billion and exchange its 50 percent interest in the Sci-Fi Channel for the 50 percent of the USA Network it doesn't already own.

Final details of the agreement have not yet been worked out, the newspaper said, quoting executives close to the discussions.

The two sides have been at odds over the companies' 50-50 ownership of USA Networks.

Viacom gained its USA Networks stake through its 1994 acquisition of Paramount Communications. MCA bought a one-third stake in USA in late 1981, which was increased to 50 percent six years later when a third partner, Time Inc., sold out to both Paramount and MCA.

MCA sued first, alleging Viacom's ownership of competing networks like MTV, VH-1 and the recently launched Nick at Nite TV Land violates their agreement dating back to 1981.

MCA said ownership should trigger a contract provision forcing Viacom to either sell its half of the cable TV network to MCA at a price determined independently or buy MCA out.

MCA, which is 80 percent owned by Seagram Co., is asking that Viacom either sell the other networks or honor the provision calling for a sale or purchase.

Viacom countersued seeking unspecified damages. It argues MCA is "attempting to garner whatever leverage it can find to force Viacom to sell cheap when Viacom had no desire to sell at all."

Viacom alleges the contract provision requiring a sale or purchase is not comprehensive enough to force it to act. It argues MCA is guilty of unfair competition and breach of its fiduciary duty under their agreement.

Since the non-jury trial began last Tuesday, four MCA witnesses have testified that the intent of the original agreement was to prevent the partners from operating any "national advertiser-supported basic cable television entertainment network" in competition with USA Network.

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