DISH doles out 700M to settle Voom litigation with Cablevision, AMC
Editor | 22-10-2012
The long-running legal saga of whether DISH Network wrongfully terminated a 15-year contract for Voom, a now-defunct HD TV channel owned by Cablevison, has been settled with a huge pay off for the latter and cable TV firm AMC.
The issue began in May 2008 when DISH took Voom off the air for poor ratings and in December of that year AMC's former owner, Cablevision, announced it was shutting the service down. Nonetheless, it sued DISH in 2008 for breach of contract and the issue has lingered on. Meanwhile, DISH's decision to drop AMC's channels from its line-up in July also loomed over the case.
DISH decided to drop AMC's four networks in July, saying the carriage fees AMC wanted were too high considering the popularity of the channels. Outside of Mad Men and Walking Dead and AMC Network, the other three cable nets were considered niche: they include IFC, the Sundance channel and WE tv. AMC, however, accused DISH of using the tactic to force an out-of-court settlement in the lawsuit. DISH's 14 million customers made up 13% of AMC's subscriber base.
As part of the legal agreement, DISH will pay a cash settlement of $700 million to Cablevision and AMC Networks, $80 million of which is in consideration for the purchase of Cablevision’s multichannel video and data distribution service licences in 45 metropolitan areas in the US. It will also enter into a long-term distribution agreement with AMC Networks to carry AMC, IFC, Sundance Channel and WE tv, and with The Madison Square Garden Company to carry Fuse on its satellite service and “convey” its 20% membership interest in Voom HD to Rainbow Programming Holdings, the Cablevison subsidiary that ran Voom, such that all of the cash settlement remains with Cablevision and AMC Networks.
Once the cash settlement is received, the parties will file a joint stipulation to dismiss the lawsuit with prejudice. Cablevision and AMC Networks will then determine how the settlement money they will jointly gain will be split.
Commenting on the deal, AMC Networks President and CEO Josh Sapan said: “We are glad to partner again with DISH Network and are delighted to bring back our popular channels and programming to their customers.”