Dish stock dropped3.75% and Disney shares slid over 2% Tuesday as the companies battle over compensation for Disney/ABC's high def channels.
Today Disney pulled four of its high def channels from the air —ESPNews HD, Disney Channel HD, Disney XD, ABC Family FD. It's been sixty days since a New York Judge ruled in favor of Disney on a 2008 lawsuit Dish filed against Disney and ESPN Media Networks, finding Dish owed Disney some $65 million for the four high-def fees.
Dish hasn't paid the $65 million, saying that it couldn't agree to Disney's "significant" fees in an effort to keep its prices low. The company says it's in negotiations, hoping to meet a resolution. (Dish points out that in the meantime, consumers can find the content from those HD channels in regular definition.) Disney confirms that the two companies are in negotiations, saying that Dish never had a deal to carry those HD channels.
This isn't the only legal battle between the satellite TV operator and the media giant — last year Dish sued ESPN for breaching its contractand not giving Dish the same carriage terms it gives Comcast and DirecTV .
This is just one of a long string of battles between cable broadcasters and programmers, part of the billion-dollar question: what is content worth? It was just this past March that Disney pulled its ABC channel off Cablevision's air until fifteen minutes into the Oscars broadcast, pushing for higher fees. We're sure to see many more standoffs between cable and satellite TV companies, and they'll continue to pull channels off the air as leverage, making consumers' programming the collateral damage.
The next major negotiation comes in August as Disney and Time Warner Cable re-negotiate their deals. Perhaps Disney's hoping Time Warner Cable picks up on its willingness to stand firm and pull content off the air.
Here are the official statements:
"A recent New York State Court ruling confirms our position that Dish Network is not entitled to carry ABC Family HD, Disney Channel HD, Disney XD HD and ESPNEWS HD without paying compensation. We hope that Dish will work with us to reach an agreement so that we can make these HD networks available to their customers."
"DISH Network offers all customers HD Free for Life, which is possible because we are committed to negotiating fair contracts that allow us to keep our prices low. That is why we could not agree to the significant fees requested by Disney and ESPN Networks for the HD feeds of Disney East, Disney XD, ESPNews and ABC Family. We continue to talk with Disney and ESPN Networks and hope to reach a fair resolution. In the meantime, DISH Network customers can enjoy the same programming on the standard definition versions of these channels."
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