DirecTV Says Playboy Suit Worth $35 Million

Aug 9, 2010 12:00 PM PST
LOS ANGELES — Playboy Enterprises Inc. plans on asking a Los Angeles Superior Court judge in October to strike portions of DirecTV's breach-of-contract suit against the adult media giant.

The suit, which DirecTV amended two weeks ago, focuses on the parties’ Amended and Restated Affiliation and Licensing Agreement, which was inked in August 2007.

DirecTV's amended suit reveals damages of $35 million, which wasn't stated in its original complaint in March.

In the complaint, DirecTV says Playboy and its Spice Hot Entertainment division promised they wouldn't negotiate better deals with other distributors but have violated that "most-favored nations" clause in their deals.

The contract allegedly provided an audit right, which DirecTV exercised last year through a PriceWaterhouseCoopers review.

"Based on what DirecTV has learned from defendants, PriceWaterhouseCoopers informed defendants that they are not in compliance with the most-favored nations clause," the suit says. "Defendants, however, have not offered DirecTV any more favorable terms for distributing defendants' programming services and have not authorized PriceWaterhouseCoopers to disclose any of the information they collected during the audit."

Citing confidentiality provisions, DirecTV does not say what the actual deal terms are. XBIZ calls to DirecTV counsel at Kirkland & Ellis went unreturned at post time.

Playboy, meanwhile, did not immediately respond to XBIZ for comment relative to the suit, but the adult media giant dismissed the complaint last week in a filing with regulators.

"The defendants have reviewed the allegations contained in the amended complaint and believe they are unfounded," Playboy said. "The defendants intend to defend this case vigorously."

The parties are slated to meet at Los Angeles Superior Court on Oct. 21. over Playboy's motion to strike.

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