Cable Operators

Dish Sues ESPN Over Classic, ESPNU Carriage Terms

8/05/2009 1:31 PM Eastern

Dish Network is asking for at least $1 million from ESPN in federal lawsuit filed Tuesday, with the satellite TV operator alleging that ESPN breached its contract by not extending the same carriage terms the programmer provided to Comcast and DirecTV.

ESPN declined to comment on the suit.

In its complaint, filed in the U.S. District Court for the Southern District of New York, Dish cited deals ESPN announced in May with Comcast and DirecTV for ESPN Classic and ESPNU. Those agreements include what "Dish understands are more favorable" terms than those Dish had agreed to.

The Comcast and DirecTV pacts represented the first manifestations of ESPN's initiative to push ESPNU from sports packages to wider digital carriage, in exchange for distributors repositioning ESPN Classic on less widely penetrated tiers.

Financial terms of the deals weren't disclosed.

In Comcast's case, the MSO said it would launch ESPNU on its Digital Classic level of service, its second-most-widely distributed package. The deal also left it up to individual Comcast systems whether to leave ESPN Classic in its current position, switch it immediately, or swap it out when ESPNU is upgraded through the fall and into early in 2010.

DirecTV said it would widen its distribution of ESPNU to the Choice programming package, beginning July 1, with ESPN Classic being repositioned to its Sports Pack.

Currently, Dish offers ESPN Classic in the Classic Silver 200/SilverHD package, and ESPNU as part of Classic Gold 250/Gold HD.

Dish's September 2005 agreement with ESPN, which runs through the end of 2013, includes a "most-favored nations" clause that requires the programmer to provide the same provisions, according to the lawsuit.

Dish said it notified ESPN in a June 9 letter of its belief that Comcast and DirecTV had received more favorable terms. The company's complaint said its damages exceed $1 million with the precise amount "to be determined at trial, plus exemplary damages."

The case is docket number 09-cv-6875 in the New York district court. Dish's counsel in the matter is New York-based Flemming Zulack Williamson Zauderer LLP.

In 2002, EchoStar Communications dropped ESPN Classic for several months in a dispute with Disney that involved ABC Family.

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