EchoStar counters in ABC Family feud
Disney 'trading political support for rate increases,' satellite distrib sez
EchoStar's charges came Wednesday in a statement responding to the court decision that temporarily stopped the satcaster from canceling the Disney-owned ABC Family cable network (Daily Variety, Jan. 2).
EchoStar said it was trying to protect its subscribers from the Disney "programming behemoth," which charges prices for its cable networks "that bear little relationship to the value they provide to consumers."
Citing Disney's ESPN, EchoStar said the network has created a "vicious cycle" of exorbitant rate increases, ramping them up "by a compounded 20% each year from 1998 to 2001," representing "10 times the rate of inflation." EchoStar removed ESPN's sister network ESPN Classic as of midnight Monday, the expiration date of the contract, because the parties had failed to reach a renewal agreement.
Focus on fees
In response Disney said, "EchoStar has abandoned all of its court arguments for dropping ABC Family," instead focusing on monthly per-subscriber fees. Disney said the rates EchoStar pays for ESPN "are essentially identical to the price paid by other providers," such as cable operators, adding that EchoStar voluntarily signed the long-term deals that call for the 20% annual increases for ESPN.
But EchoStar said Disney is "the only television programmer" that "has tied its political position" on the DirecTV merger "with any kind of programming deal." As EchoStar put it, Disney is applying "heavy-handed tactics of trading political support for rate increases."
Disney acknowledged that it's afraid of "EchoStar's penchant for wielding monopoly power in unfair ways," saying "EchoStar has taken actions that show the danger to consumers of having only one DBS (satellite) provider."
EchoStar and Disney will be in federal court in Los Angeles on Jan. 10 to argue whether the satellite distributor has the legal right to cancel ABC Family in the middle of a 10-year contract signed in 1995.
EchoStar's main argument in court papers is that by purchasing ABC Family from Rupert Murdoch and Haim Saban in October (when it was known as Fox Family), Disney has changed the ownership of the network, triggering a clause in the affiliation agreement that allows EchoStar to drop it.
Disney counter-argues in its statement that "no such change has taken place … and thus EchoStar is attempting to illegally breach its contract."
The court issued a temporary restraining order on Monday preventing EchoStar from jettisoning ABC Family.
Disney is seeking an injunction that would keep ABC Family on the satellite until a judge rules on the legal issues.
