RealNetworks (RNWK) In Talks with NTV Networks, of Viacom (VIA), to Reorganize Rhapsody Music Service
RealNetworks, Inc. (NASDAQ: RNWK) is currently in discussions with MTV Networks, a division of Viacom International Inc. (NYSE: VIA), relating to the possible strategic reorganization of its jointly owned and operated business-to-consumer digital audio music service, Rhapsody America LLC.
These negotiations are focused on a potential restructuring of RealNetworks' and MTVN's relative economic rights in the joint venture and on their relative abilities to exercise control over decision-making to enable Rhapsody to operate more independently of either party. If these discussions result in a definitive agreement, RealNetworks may agree, among other things, to adjust the corporate governance and/or management structure of Rhapsody and to reallocate the ownership of Rhapsody between RealNetworks and MTVN such that RealNetworks' percentage ownership of Rhapsody could be reduced from 51% resulting in both parties owning 50% or slightly less. These discussions are currently in the preliminary stages, and RealNetworks cannot predict whether they will result in a definitive agreement or, if a definitive agreement is reached, the final terms and conditions of any such agreement, or the impact of a restructuring on RealNetworks' financial statements or results of operations.
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