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NBCU Files Arbitration Claim Against Paxson

May 12, 2005  •  Post A Comment

NBC Universal filed an arbitration claim Thursday against Paxson Communications, challenging the beleaguered broadcaster’s plan to unwind its joint sales agreements with NBC in favor of adopting a content strategy that focuses more on paid programming.

The move is the latest front in the fight between Paxson and NBCU. In addition to the battle over Paxson’s programming strategy, the two companies are locked in a pitched battle over whether Paxson must pay NBCU more than $700 million to buy back NBCU’s 32 percent stake in Paxson.

The latest fight comes after Paxson in March began informing both NBCU and various station groups with which it has JSAs that those pacts would be unwound by the end of June as Paxson moves away from airing original content. NBCU officials have balked at the plan, and indicated last month that they would explore all options available to them in an effort to block the move.

By filing an arbitration claim, NBCU is pursuing a remedy from the American Arbitration Association. Should the process play out, the two companies would come together to select an arbitrator, who would make a ruling based on each company’s presentation. That ruling is often binding in such cases. Many companies opt for this route when there is a desire to keep their legal tussle private.