CBS Corp. has filed a law suit against Belo Corp. over the failure to close on the sale of New Orleans UPN affiliate WUPL, Belo said Thursday.
Belo cut a deal in July to buy WUPL for $14.5 million. It planned to form a duopoly with its top-rated CBS affiliate in the market, WWL New Orleans.
The deal was slated to close by the end of 2005, but skidded to a halt when Hurricane Katrina devastated the market in late August. Along with some physical damage to their facilities, TV stations have taken a huge financial hit. In the fourth quarter alone, Belo says WWL lost $4.3 million in revenue.
Recently, local stations have said that advertising is picking up, but the market’s future remains uncertain.
Hundreds of thousands of residents fled the area, shrinking the market size, with many expected never to return.
Along with a diminished audience, TV stations are not receiving ratings information.
Nielsen has been unable to collect ratings in the market since the storm and November 2006 is the earliest that any measurement is expected. Without new ratings, stations have been forced to sell off old books and estimates from national numbers. WWL has even contracted a research firm to provide some additional data for its advertisers.
On a conference call with analysts, Belo Chairman Robert Decherd said that CBS filed the suit in January, but would not comment further. “We believe our position in the lawsuit is sound and we intend to defend vigorously against the allegation,” Decherd said.
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