EchoStar, Court TV Dispute Unlikely to End Soon
EchoStar’s carriage dispute with Court TV (CD Jan 24 p14) shows little sign of ending soon since neither side seems inclined to strike a deal, sources said. The dispute, already over a month old, concerns how much of the “per-sub fee” the DBS provider will pay to carry the channel. EchoStar has gone to war with other networks on how much to pay monthly for each of its 12.8 million subscribers. Court TV says it’s seen in 86 million U.S. homes.
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This fight erupted when EchoStar tried to move Court TV to a different programming tier, said a cable official. EchoStar said Court TV wanted too much money and refused its offer to be in its America’s Top 120 Package during talks. Court TV was in the America’s Top 60 package, a cable industry official. Carriage ended Dec. 31, when the contract expired, an EchoStar spokeswoman said: “There have been no updates to anything at this time.” A spokeswoman for Turner, owner of Court TV, also said there’s “nothing new” to report.
EchoStar may be readying a siege against Court TV, said analysts and former cable industry executives. “We've seen some of these negotiations last a little longer as of late than they used to last,” pay-TV consultant Bruce Leichtman, a former Continental Cablevision official, said: “Many of them used to kind of boil up and dissipate very shortly after they became public.” EchoStar’s settlement Mon. of a separate spat with HBO, owned by Time Warner like Court TV (see separate report in this issue), doesn’t necessarily telegraph an end to the Court TV fight, Leichtman said: “They are separate issues, even though HBO and Court TV might be in the same parent company.” EchoStar dropped 2 Lifetime channels, saying the network demanded a 76% rise in its carriage rate. The programmer denied it. The Lifetime channels were restored to the Dish Network in late Jan. 2006, about a month after being yanked.
EchoStar is carrying A&E’s Biography channel in place of Court TV. By not paying Court TV’s carriage fee, EchoStar Chmn. Charles Ergen is trying to keep a lid on costs, another former cable executive said: “He’s known for fighting… to keep rates down for the consumers.” Ergen is believed to be trying to make an example of Court TV, showing other popular cable networks he'll yank them if they make what he deems unreasonable demands, said former cable and satellite industry executives. “Charlie is constantly looking for opportunities to send a message,” and Court TV gives him one, said a former EchoStar official: “If that means drawing the line in the sand for a couple of rather marginal programmers, that’s what he'll do.” Last month Court TV was the 16th most popular cable network, with a primetime audience averaging about 891,000 homes, according to Nielsen. Lifetime, restored by EchoStar, was the 5th most popular.
Ergen has to balance economy against driving Court TV fans to a cable operator, where they can watch the network, the executive said: “What will be interesting is what kind of backlash he gets from his consumers for trying to take them off. It’s always hard to take a channel off.” Court TV has run TV ads criticizing EchoStar. “It doesn’t feel to me like Court TV is about to get back on,” said Janco analyst Matthew Harrigan: “EchoStar has its heels dug in pretty hard, and I think they're probably willing to make an example of one company.”
Meanwhile, Dish will continue to carry HBO and Cinemax, now that EchoStar has dropped an FCC carriage complaint and HBO has dropped a federal suit. Dish had complained that HBO was forcing it to carry other Time Warner-owned networks (CD Nov 24 p5). HBO later sued EchoStar in U.S. Dist. Court, N.Y., alleging late payments (CD Jan 24 p14).