Norwegian telecommunications giant Telenor and Vivendi Universal's TV and film division Canal Plus are battling in court over the payment for an agreement the two companies reached last summer.
Canal Plus is demanding immediate payment of Euros 237m for the sale of its 50% stake in Nordic pay-TV operator Canal Digital to the telecommunications company. Telenor, however, is refusing to pay, claiming that the terms and conditions of the agreement are not yet in place.
Last July, Telenor took control of Canal Digital by buying out Canal Plus' 50% stake in the joint venture for Euros 300m, of which Euros 63m was deferred. The two companies also signed a long-term exclusive distribution agreement for Canal Plus' premium pay-TV channels and the Kiosk pay-per-view service on Canal Digital's platform. Canal Plus Technologies would continue servicing Canal Digital with its interactive TV technology, as part of the agreement.
Canal Plus now claims that Telenor should fulfil the sales agreement of July with immediate effect and is calling for a temporary injunction. Telenor, on the other hand, claims that the real intention behind Canal Plus' petition for the injunction is to obtain payment before the terms and conditions of the agreement have been approved by the respective governmental authorities.
Telenor stresses the importance of an access to television content from Canal Plus as one of the main conditions for the agreement. Such an access can only become possible when approved by the EU Commission. Canal Plus, on the other hand, argues that a delayed settlement of the sale will be a major financial burden for the company.
The considerable losses of the company amounting to $38.7m in 2000, were understood to be the main reason for the restructuring of Canal Digital's ownership structure last year. Telenor and Canal Plus have lost around $106m since the company was established in 1997 as a joint venture between Telenor and Filmnet, later acquired by Canal Plus.
Telenor's main interest in buying out Canal Plus has been its need for digital content and interactive services. Canal Digital broadcasts to one million paying customers in the Nordic countries.