SEC Probes If AOL Double-Booked Revenue On Oxygen DealOct 7, 2002 | TheStreet.com
The Securities and Exchange Commission reportedly is investigating AOL Time Warner's investment-and-advertising pact with Oxygen Media to determine if the media giant booked the same revenue in its Internet and cable divisions.
The inclusion of the Time Warner Cable division indicates that the government agency is widening its inquiry beyond the Internet operations and may raise new concerns about hundreds of millions of dollars in advertising sales between company divisions, The Wall Street Journal reported.
Under terms of the April 2001 agreement, Time Warner Cable agreed to put Oxygen's cable channel on its systems without a launch fee, while Oxygen agreed to spend $100 million in advertising at AOL, mostly at America Online. According to the Journal, AOL engineered advertising transactions so that the ad revenue was reflected both in the online and cable division's numbers. Intercompany ad deals such as the Oxygen accord were widespread at AOL after the merger.
An AOL spokeswoman said the accounting for the deal was appropriate.