Dish, Viacom Wait For Ruling
By Steve Donohue -- Multichannel News, 1/18/2004 7:00:00 PM
A federal court in California was expected to rule late Friday on whether Viacom Corp. could pull the signal for CBS from EchoStar Communications Corp., just days before the Eye Network is scheduled to air the Super Bowl.
The two companies have been fighting over terms for a broad carriage deal that would give the direct-broadcast satellite provider rights to distribute CBS and Viacom's cable networks. EchoStar's retransmission-consent agreement for CBS expired Dec. 31, but the companies agreed to extend the pact until Friday.
Viacom spokeswoman Susan Duffy declined to comment Friday when asked if the media giant would pull CBS from EchoStar. But Duffy and EchoStar spokesman Marc Lumpkin said the companies were continuing to negotiate terms for a contract.
EchoStar sued Viacom on Jan. 7, asking the U.S. District Court in Oakland, Calif., for a temporary restraining order that would prevent Viacom from pulling CBS from its Dish Network platform.
EchoStar chairman Charlie Ergen told reporters at the Consumer Electronics Show in Las Vegas two weeks ago that Viacom was attempting to use CBS's scheduled airing of Super Bowl XXXVIII on Feb. 1 as leverage to drive stiff rate hikes for Viacom's cable networks.
Viacom responded to EchoStar's suit last Wednesday, telling the court that EchoStar should have sought relief from the Federal Communications Commission rather than ask the court for a restraining order. Viacom also told the court that it has the right to tie license fee hikes and agreements to launch new networks like Nicktoons to retransmission consent for CBS.
EchoStar's request for a restraining order, Viacom argued, is a negotiating tactic.
"Apparently believing that delay and time pressure would benefit its position in the price negotiations, EchoStar dragged its feet in the negotiations by the time the current agreement expired on Dec. 31," Viacom wrote in a memorandum to the court. "Then, having manufactured a phony emergency, EchoStar rushed to court, giving Viacom 10 minutes' notice, to induce the court to intervene in the parties' negotiations."
Ergen acknowledged at EchoStar's CES press conference that the Super Bowl gives Viacom substantial leverage in the contract talks. Hughes Electronics Corp. vice chairman Eddy Hartenstein also razzed Ergen on a CES panel by telling attendees that DirecTV Inc. would carry CBS and the Super Bowl in HDTV, but it wasn't clear if EchoStar would.
DirecTV cut a long-term carriage deal with Viacom earlier this month that included carriage of all MTV Networks, Black Entertainment Television, CBS's HD feed of the Super Bowl and HD signals from stations owned and operated by CBS.
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