Viacom

Viacom has been ordered to pay the piper. The media conglomerate that owns Paramount Pictures has lost its appeal of an arbitration order to pay $299 million to the original shareholders of Harmonix, a game development studio that Viacom agreed to buy in 2006 for $175 million, plus performance-based bonus payments. The setback is just the latest in a series for Viacom, whose ambitious foray into music video games has resulted in massive losses and acrimonious litigation. The ruling, from a Delaware Court of Chancery judge, was first reported Monday by The Hollywood Reporter . The lawsuit stemmed from Viacom's refusal to pay Harmonix bonus payments based on the performance of the "Rock Band" game franchise, which sold more than 10 million units but, nevertheless, lost money because of the high cost of creating the instruments needed to play the games.

Pay-TV distributors Time Warner Cable and DirecTV have come out in support of Cablevision Systems Corp.'s lawsuit against Viacom Inc. The battle is over how Viacom, parent of more than 20 cable channels including MTV and Nickelodeon, sells its networks to cable and satellite companies. Cablevision claims that Viacom illegally forces distributors to carry low-rated channels in return for access to its popular networks. The practice, known as bundling, is commonplace in the media industry.

DirecTV subscribers may lose popular channels owned by Viacom Inc., including MTV, Comedy Central and Nickelodeon, as early as Wednesday if the two companies are unable to come to terms on a new distribution deal. Viacom said on its website that its current contract with DirecTV expires at midnight Tuesday and no agreement is near. "Despite our best efforts, DirecTV has rejected all of our proposals to renew our agreement," Viacom said, adding that the latest offer from the satellite broadcaster is for a lower rate than Viacom said it gets from any other distributor in the industry.

With its ratings in free fall because its programming is no longer available on DirecTV, Viacom's kids channel Nickelodeon is having to provide frustrated advertisers extra commercials to make up for its shrinking audience. “I'd be lying to you if I said clients haven't contacted us and said what's our game plan,” said Shelly Hirsch, CEO Beacon Media, an advertising firm that specializes in children's TV and has almost 50 clients on the network. “I wish this thing settles quickly; we do a lot of business with Nickelodeon.” Since DirecTV stopped carrying Nickelodeon in its roughly 20 million homes July 10, ratings have dropped more than 20%. Last weekend was particularly brutal as Nickelodeon's total day audience was down 56% on Friday, 44% on Saturday and 45% on Sunday.

Viacom Inc. has been ordered to pay an additional $383 million to the makers of Rock Band, the latest development in a long and costly saga surrounding the media giant's failed attempt to enter the video game business. In a regulatory filing, Viacom, the owner of MTV Networks and Paramount Pictures, said accountants in a private arbitration process determined that it owes the money to former shareholders of Harmonix Music Systems Inc. on top of a $150-million bonus payment that it previously made.

After the coffee. Before analyzing the Emmy nominations. The Skinny: Once again I've been snubbed by the Emmy Awards. Where's the love? Thursday's headlines include early analysis of the Emmy nominations, China's plan to release "The Dark Knight" and "The Amazing Spider-Man" opposite each other and the latest on the fight between Viacom and Nickelodeon. Daily Dose: The Emmy nominations were announced Thursday morning (see below). Clearly the most awkward Emmy nomination has to be best actress for Kathy Bates of "Harry's Law. " NBC, of course, canceled "Harry's Law" despite it being one of the network's most popular dramas.

Viacom Inc. and the former owners of the studio that makes its Rock Band video games are enmeshed in a legal battle, wrangling over hundreds of millions of dollars at the same time that sales of the games are plummeting. Former shareholders in Harmonix Music Systems have filed a lawsuit that has triggered a high-stakes arbitration proceeding with Viacom just as the media giant is attempting to sell the video game maker after years of losses. The legal and financial morass is likely to complicate that effort.

Viacom Inc. has found an unlikely buyer for Harmonix Music Systems, the creator of its Rock Band video games. The media giant announced Thursday that it had sold the Cambridge, Mass.-based Harmonix to Columbus Nova, a private investment firm in New York. Terms of the deal were not disclosed, but several analysts said the price was probably less than $100 million, significantly less than Viacom paid to acquire the development studio in 2006. One person familiar with the matter but not authorized to speak about it for attribution said Viacom wanted to sell Harmonix by Dec. 31 to improve its tax position in the current year.

Despite a vexing ratings slump at its children's network Nickelodeon, Viacom Inc.'s second-quarter profit soared 56%. The strong earnings were produced by higher fees from pay-television operators and lower expenses at the media company's Paramount Pictures movie studio. For the quarter ended March 31, Viacom earned $585 million, or $1.07 a share, up from $376 million, or 63 cents, a year earlier. Revenue grew 2% to $3.33 billion. "Across our divisions we sharpened our focus on execution and efficiency while continuing to invest in programming," Viacom Chief Executive Philippe Dauman told analysts in a Thursday morning conference call.

Viacom Inc. isn't disclosing to shareholders the full extent of its potential environmental liabilities, said three environmental groups, who asked the Securities and Exchange Commission to look into the issue. Viacom's cleanup costs at more than 30 Superfund sites around the country could total $300 million, said Friends of the Earth, Citizen Action and the Sierra Club.