Policy

Hearst Key to Lifetime-Dish

2/01/2006 4:00 PM Eastern

To end one month of darkness on Dish Network, Lifetime Television and spinoff service Lifetime Movie Network needed to again enlist the retransmission clout of corporate cousin Hearst-Argyle Television Inc.

Parent Lifetime Entertainment Services -- jointly owned by Hearst Corp. and The Walt Disney Co. -- reached a multiyear deal with Dish owner EchoStar Communications Corp. late Jan. 31, ending a bitter, he said/she said dispute over the size of rights increases and averting what was threatened to be a permanent dropping of the networks with the dawn of February.

In previous negotiations with EchoStar, Lifetime had served as an agent for Hearst-Argyle stations, relative to retransmission consent, which the station group assigned to help the women's programmer gain carriage. Lifetime Entertainment Services, in turn, compensated Hearst-Argyle for the values of the secured distribution.

However, that carriage relationship was unhinged late last year. On Dec. 30, Hearst-Argyle, in an 8K filing, said it had reached a retransmission-consent agreement with EchoStar in which the direct-broadcast satellite company agreed to pay the station group in cash to carry the stations' signals. Bear, Stearns & Co. Inc. valued that fee at some $11 million annually. As such, Lifetime was forced to negotiate with Dish on its own.

But in an amendment to the previous 8K filing, Hearst-Argyle indicated that on Jan. 31, the company revoked the EchoStar accord inked in late December. Instead, it signed a "replacement agreement" that is "substantially similar to the previous contract," except that EchoStar will not pay Hearst-Argyle cash consideration and that the station group and Lifetime amended its compensation arrangement.

In the filing, Hearst-Argyle "estimates that the aggregate annual consideration amount payable by Lifetime to the company under the June 30, 2004, agreement as amended (which takes into account consideration relating to numerous agreements with multichannel-video-programming distributors) will be less than 2.5% of the company's estimated 2006 net operating revenues."

Dish declined comment on the matter, while Lifetime deferred questions to Hearst-Argyle, which could not be reached for comment by press time.

Following the lengthy rights-fee dispute -- Dish claimed that the programmer was seeking a 76% rate increase over the length of the contract for the two networks, while Lifetime officials said they were only asking for pennies per month -- the services were restored at 11 p.m. (EST) Jan. 31. They had been off Dish since New Year's Day.

Under the agreement, Lifetime returned to its slot on Dish's widely distributed “America's Top 60” package, which, sources estimated, reaches 8.5 million subscribers. However, LMN was repositioned from the “America's Top 120” package to the “America's Top 180” package, which reach some 7.8 million and 4.5 million of Dish's 12 million-subscriber base, respectively, according to industry sources.

In the course of the dispute, Oxygen, another programmer targeting women, was able to secure long-term carriage on Dish's Top 120 package last month. Meanwhile, free previews of Oxygen and other distaff-leaning networks, WE: Women's Entertainment and multiplex Encore Love, have been extended from January throughout February as a means of "thanking Dish subscribers for their patience," a spokesman said.

March