MGM is taking Italian film and TV giant Cecchi Gori Communications to court over non-payment on an output deal covering 200 films and television programmes currently being broadcast on Cecchi Gori-owned TV channel TeleMonteCarlo (TMC).

MGM is claiming that it is still owed $10m (L20bn) from a $20m (L40bn) deal with Cecchi Gori, according to Italian press reports. The Italian company had obtained a $233m (L470bn) loan from US bank Merrill Lynch for film and TV programming acquisitions before entering into the deal. However, according to MGM, repayments from Cecchi Gori to the studio stopped in September 1999 leaving L20bn of its debt unpaid.

MGM broke its contract with Cecchi Gori and has been attempting to stop TMC broadcasting its product without success. The studio is trying to gain an injunction in a Rome court against TMC broadcasting the film Stargate, scheduled for Sunday evening. Cecchi Gori is objecting to the manner in which MGM broke the contract.

MGM's action is the second blow for Cecchi Gori in recent weeks following a decision by a Rome court last Friday (March 17) to reject Cecchi Gori's appeal against his partners in pay-TV company Stream. Cecchi Gori chief Vittorio Cecchi Gori attempted to block News Corp and Telecom Italia's proposed capital increase of Stream which he claimed was designed to squeeze him out of the operation. News Corp and Telecom each hold 35% of Stream while Cecchi Gori holds 18% and soccer rights consortium SDS holds the remaining 12%.