Dish, AMC Squabble Heats Up (DISH, AMCX, CVC)
May 4, 2012 by Paul Ausick
Subscribers to satellite TV service Dish Networks Inc. (NASDAQ: DISH) may no longer be able to enjoy such hit programming as “Mad Men,” “Breaking Bad,” and “The Walking Dead” due to a renewed battle between Dish and AMC Networks Inc. (NASDAQ: AMCX). The squabble started when AMC’s networks were part of Cablevision Systems Corp. (NYSE: CVC) and Dish agreed to carry Cablevision’s high-definition channels branded under the name ‘VOOM’. Cablevision spun-off AMC last year.
Dish agreed to broadcast the channels for 15 years, but stopped after just 3 years charging Cablevision with failing to support the new channels. Cablevision sued Dish for $2.5 billion.
The Wall Street Journal reports that in a pre-trial ruling, the court found that Dish had “in bad faith” destroyed e-mail evidence. Dish appealed the ruling twice and lost twice, most recently last week. The ‘VOOM’ channels were canceled in 2009.
Normally the threat to withdraw programming is a negotiating ploy when the content provider, in this case AMC, wants more money than the cable or satellite system wants to pay. This case is slightly different, though, given the rulings against Dish. This time Dish is no doubt hoping that AMC will drop the suit in exchange for Dish’s agreement to continue carrying the AMC channels, which include AMC, Sundance, IFC, and We TV. Problem is, Dish has a lot more to lose than AMC does.
Shares of Dish are down about -3% at $31.64 in a 52-week range of $20.89-$35.64. Shares of AMC are down -2.4% at $43.48 in a 52-week range of $29.66-$46.69.
Paul Ausick
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