TORONTO – MTV Networks has decided to terminate its licensing agreement in Canada with the owners of MTV and MTV2
CHUM Limited today announced that the Viacom-owned company has decided to exercise its right to terminate its agreement with Craig Media Inc. The channels currently known as MTV Canada, a youth culture channel, and MTV2, a music video channel, will be re-branded effective June 30, 2005.
No details yet on what the new channels will be called or what sort of programming deals might be worked out.
MTV Canada and MTV2 were among the channels CHUM acquired in its purchase of Craig Media Inc. on December 1, 2004. Under the terms of its original joint venture and licensing agreements with Craig Media, MTV Networks International had the right to terminate such agreements upon a change of control in the entity that owned and operated MTV Canada and MTV2.
As a result, CHUM will be required to pay to MTV Networks the license fees remaining under the terms of the agreement, the sum of which was included within CHUM’s assessment of the value of Craig Media’s assets, says the CHUM release. These fees total approximately C$10 million.
In addition, MTV Networks International will no longer have the option to acquire an equity interest in the channels.
