TimeWarner pays out $90m after waging war of violence and thuggery
TimeWarner AOL, the world's largest media group, has paid an estimated $90m (£62m) to settle a potentially damaging legal action over an alleged dirty tricks campaign against a rival.
The Independent On Sunday can reveal that Time- Warner settled the case just before it was due to be heard in front of a jury in Brooklyn this month.
The trial would have shone a light on a campaign of violence and bribery alleged to have been launched by a company that at the time was run by two of the US's best-known business leaders, Gerald Levin and Ted Turner.
The case involves Liberty Cable, a small New York entertainment company, which was the first company to use satellite technology rather than underground cable to broadcast movies and news in the early 1990s.
Transmitting programmes via satellite dishes to buildings across the city, Liberty wanted to break TimeWarner Cable's monopoly in New York.
But Liberty quickly suspected that TimeWarner had a plan to destroy the innovative newcomer.
TimeWarner was anxious that if it lost market share in New York, it would lose out in the rest of the country as well.
Liberty quickly built up 26,000 customers in 24 months and secured subscription deals with prestigious New York properties such as The World Trade Center, the Four Seasons Hotel and the General Motors Building.
However, Liberty staff were frequently at odds with Time- Warner Cable crews. Technicians arrived at building sites to find their wires and equipment had been either ripped out or were unusable.
Liberty's lawyers later alleged that TimeWarner had set up a task force with the sole purpose of destroying the start- up before it became too big.
It was alleged that the task force met regularly and orchestrated an undercover pattern of vandalism, thuggery and bribery that reached dangerous proportions.
The court documents claimed that at one point TimeWarner contractors threatened to throw Liberty technicians off the roof of a building they were hooking up to Liberty Cable.
At the time TimeWarner owned 22 per cent of Turner Broadcasting, which owned MGM movies, news network CNN and Turner Classic movies as well as a huge library of films. Subsequently, TimeWarner bought Turner.
Mr Levin and Mr Turner allegedly sealed up exclusive broadcasting rights with Time- Warner Cable to the exclusion of Liberty's subscribers.
Turner's stake in TCI Communications, the largest cable distributor in the US, broadcasting the Home Shopping Channel and sports from Madison Square Garden, also helped block Liberty's access to these high-rated programmes.
But it wasn't only denying programme access that strangled Liberty's revenues.
During a lucrative subscription deal for 12,000 Stuyvesant Town rental apartments, the biggest residential installation in the US, a $1m payment was made to Met Life, which owned the apartments, to shut out Liberty from the complex.
The move angered the tenant association, which was annoyed at the premium fees TimeWarner Cable charged. The cable war intensified, with TimeWarner Cable contractors waging fist-fights with building superintendents who refused to bend to TimeWarner demands.
Levin, fearing that Liberty would take the cable wars to the country, personally met Mr Price, a former publisher of Rupert Murdoch's New York Post, and asked him to leave the company or stop the head-to-head competition in buildings across the city.
Minutes before the trial in February the board of AOL TimeWarner agreed to an estimated $90m payout.
"The case was settled outside of court and both parties are legally bound not to discuss it," said Lloyd Constantine, a lawyer for Liberty, which was sold to Bartholdi Cable four years ago when the case was filed.
A TimeWarner attorney had "no comment" to make when questioned on the case.
|
|
||