NEW YORK (AP) - Clearing a possible hurdle in its merger with CBS, Viacom won a legal decision against Chris-Craft Industries, its half-partner in the UPN television network.
The ruling late Thursday by a judge in New York State Supreme Court also sets the stage for a change in ownership of UPN, which has been coming back in recent months with popular shows such as wrestling.
In throwing out Chris-Craft's complaint, Judge Herman Cahn let stand a legal provision Viacom had
Shareholders have already approved the CBS-Viacom merger, but the deal is still awaiting clearance from regulators. The companies hope to close the merger next month.
If Viacom winds up owning all of UPN, it must get permission from the Federal Communications Commission to own two networks at the same time, which is forbidden under current rules.
The spat over UPN centered over a clause in the partnership agreement stipulating that neither partner could own an interest in another network. Chris-Craft claimed Viacom violated the deal by agreeing to merge with CBS, but the court sided with Viacom's argument that it has not broken the terms since its merger with CBS has not closed.
Viacom had triggered the "buy-sell" section of the UPN partnership agreement six weeks ago after becoming frustrated with its negotiations with Chris-Craft over the future of the network.
The talks have been ongoing since last fall, when Viacom announced its deal to merge with CBS. At the time, it was the largest merger in the media business, but has since been surpassed by the AOL-Time Warner deal announced in January.
Viacom released a statement from its chairman, Sumner Redstone, late Thursday: "We are pleased that Judge Cahn has ruled in our favor and look forward to resolving the ownership of UPN."
A spokesman for Chris-Craft did not return a phone call seeking comment.
Viacom has said it would like to own the other half of the network, and believes it make UPN profitable, especially once it completes its merger with CBS and draw on management talent there.
Long a distant contender to NBC, CBS, ABC and Fox, UPN has been coming back in ratings recently thanks to popular shows like
. But it still has yet to turn a profit and has lost more than $900 million since being founded in 1994.
Chris-Craft, a former boat builder, owns 10 television stations in major markets through BHC, many of which are affiliates of UPN. Viacom's media properties include MTV, VH1, Nickelodeon, Blockbuster and the Paramount movie studio.
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