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Mar 5, 2004  •  Post A Comment

Martha Stewart Found Guilty on All Counts

A federal jury Friday found domestic diva Martha Stewart guilty of lying to federal investigators and obstructing justice in connection with her sale of ImClone Systems stock.

The verdict, reached by eight women and four men, came on the third day of deliberations and could result in Ms. Stewart facing as much as 20 years in prison and a fine as high as $90 million, though it is unlikely she will face such stiff penalties. The sentencing phase is scheduled to begin June 17.

Specifically, Ms. Stewart was found guilty of two counts of making false statements, one count of conspiracy and a single count of obstruction. The jury also found Ms. Stewart’s broker, Peter Bacanovic, guilty of four of five charges leveled against him, including making false statements, obstruction, perjury and conspiracy.

A more serious charge of securities fraud was thrown out before the jury began its deliberations.

Ms. Stewart said she would appeal the convictions.

In the moments leading up to the reading of the verdict, shares in Ms. Stewart’s company, Martha Stewart Living Omnimedia, surged as much as 16 percent to $16.27 on the anticipation of a not guilty verdict. Trading was eventually halted before the verdict was read.

The verdict raises a raft of questions about the future of Ms. Stewart’s company, which has been buffeted ever since she was indicted. Among the questions needing answers is the future of her syndicated television series.

The company reported Thursday that it swung to a fourth-quarter profit despite a revenue decline. The company said it continued to suffer under the cloud of Ms. Stewart’s legal troubles and that it had developed a series of contingency plans to deal with the trial’s outcome.

Already, the company has attempted to distance itself from the doyenne of domesticity by developing products that rely less on the Martha Stewart name. In addition, Ms. Stewart stepped down as chairman, taking on the title of chief creative officer.

EchoStar Preparing to Drop Viacom Channels: EchoStar Communications’ DISH Network satellite service will stop carrying signals from CBS’s 15 owned-and-operated television stations at midnight Monday if the satellite company and CBS parent Viacom can’t resolve a legal dispute over retransmission fees and the networks EchoStar must carry.

The deadline stems from a restraining order imposed by a federal judge that was set to expire March 8, after which EchoStar must cease airing those 15 O&Os if the two companies have not reached a settlement. Local affiliates not owned by Viacom are not affected.

At issue is the rate EchoStar must pay Viacom to retransmit CBS and which cable networks the satellite operator must carry. Specifically, EchoStar officials are balking at Viacom’s demand that in order to carry CBS it must also carry the Nickelodeon GAS channel. EchoStar filed an antitrust suit against Viacom to challenge the media giant’s demands.

If no agreement can be reached by the deadline, all of the Viacom networks carried by EchoStar would go dark. In addition to top-rated CBS, the networks affected include MTV, VH1, Comedy Central and Nickelodeon.

Tribune, Debmar Studios Reach ‘South Park’ Distribution Agreement: Tribune Entertainment Co. reached an agreement with Debmar Studios for an off-cable distribution deal for “South Park,” the Comedy Central hit. Under terms of the agreement, Debmar Studios will distribute “South Park” in the top 30 markets throughout the United States, while Tribune Entertainment will distribute the show in all remaining markets and exclusively oversee all advertising sales for the program.

The show will premiere as a strip in fall 2005 and has now been cleared in 19 of the top 20 markets, representing more than 60 percent of the country. Top markets clearing the program include WPIX-TV, New York; KCAL-TV, Los Angeles; WCIU-TV, Chicago; WPSG-TV, Philadelphia; and KBHK-TV, San Francisco. It will be carried on stations from the Tribune, Viacom, Cox, Belo, Sinclair and Weigel station groups. “South Park” is being offered on a cash plus 90-second barter basis.