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Killer win for Viacom.

WWF Cleared to Leave USA for Viacom

Whatever happened to loyalty in professional sports? Oh, wait, this is pro wrestling we're taking about.

By Dave Marino-Nachison

A Delaware court ruled in favor of World Wrestling Federation Entertainment (Nasdaq: WWFE) and Viacom (NYSE: VIA) in a contract dispute yesterday that will likely pave the way for increased partnerships between the companies -- to the detriment of USA Networks (Nasdaq: USAI).

USA and Viacom were both negotiating to run the wrestling company (WWF) and Foolish Duelee's popular series of shows. However, the bidding, according to reports citing testimony, got too rich for USA. That led the cable network, which had been broadcasting the company's shows, to the courtroom.

Court papers reportedly detailed the Viacom offer, a five-year deal, as including weekly payments of $500,000, $3.5 million for seven annual specials, in excess of $1.1 million in production for new television series and movies, $8 million in fees for transferring shows to Viacom's The Nashville Network (TNN), and the provision for Viacom to buy between $30 million and $100 million in WWF stock in coming years. In the near-term, Viacom is taking a 3% stake in WWF.

Now wrestling fans can expect to see their favorite stars not only on TNN but also Viacom's CBS and MTV, supported by aggressive cross-platform promotion. It's not immediately clear how this will affect the WWF's fledgling XFL professional football league -- which might have found airtime on USA but wasn't mentioned in a WWF release this morning. CBS doesn't current have any professional football in its lineup.

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