CBS on Thursday unveiled an agreement with YouTube, the online video site, to form a special web channel featuring clips and highlights from the annual “March Madness” college basketball tournament.

The channel, which will be sponsored by Pontiac, comes just two days after Viacom, CBS’s former sister company, filed a suit against YouTube for copyright infringement. It is an indication of traditional media companies’ mixed feelings for YouTube at a time when they are trying to reach young viewers who are increasingly consuming video online.

The deal also demonstrates the tournament’s growing prominence as a new media laboratory. CBS’s coverage of the event online last year was hailed as a watershed for internet video, with the network serving more than 15m internet streams.

Many fans turned to the webcast because particular games were played while they were at work, or were not selected for on-air broadcast in their market.

With the new YouTube channel, CBS believes it will be able to offer Pontiac a large online audience to complement advertising on the CBS television network and on a series of more targeted webcasts of specific games. The YouTube channel could also serve as a promotional device to help the network direct fans back to its internet coverage.

Quincy Smith, president of CBS Interactive, said basketball fans would be posting tournament footage on YouTube in any case, and that the agreement reflected the media group’s strategy to reach out to them rather than trying to discourage them.

“We’re going to talk to everyone out there to think about what the best communities are for our advertisers, but we need to get paid for our content,” Mr Smith said.

He declined to comment on whether CBS was interested in striking a broader pact with YouTube to license its content.

So far, CBS and other big media companies have rebuffed Google’s attempts to forge such agreements – in part because of disputes over fees and questions about who would control advertising relationships.

The Viacom lawsuit, which accused YouTube of “massive intentional copyright infringement” and seeks more than $1bn in damages, reflected the growing tension between the camps.

In light of that, Suzie Redier, head of advertising at YouTube, struck a diplomatic tone on Thursday, saying the site’s community was “incredibly fortunate” to have the CBS footage.

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