CSG must pay Comcast full amount
CSG Systems said it must pay Comcast Corp. the full amount of a monetary award that stems from a protracted legal battle between the two companies.
Earlier this month, an independent arbitrator ruled that CSG, a Colorado-based billing and customer care provider, must pay Comcast as much as $120 million in Most Favored Nations (MFN) damages. The complaint originally involved CSG and AT&T Broadband, but Comcast inherited the dispute when it purchased AT&T Broadband in November 2002.
At the time of the arbitrator ruling, CSG said it would seek a modification, believing the judge made a mathematical error that could reduce the MFN damages by up to $50 million. CSG said the arbitrator ruled on Oct. 27 that he did not miscalculate the damages, putting CSG on the hook for about $119.6 million. CSG said it paid $65 million of the award to Comcast on Oct. 21, using corporate funds, and expects to pay off the remaining $55 million.
As a result, CSG recorded those figures as a charge in Q3, reflecting it as a reduction in revenue. For the period, CSG posted revenues of $25 million, down 84 percent from $155.6 million, and a net loss of $53.6 million ($1.04 per diluted share), compared to net income of $5.9 million (11 cents per share) in the year-ago period.
Shedding some positive light on its situation, CSG noted it won new business from the following service providers: Beijing Telecom, Saudi Telecom, Sky Italia, British Telecom and Cometa Networks.