ABC Family Fights Back in Court

12/18/2001 9:25 AM Eastern

ABC Family wants a court to bar EchoStar Communications Corp. from
dropping it effective Jan. 1, charging that the loss of carriage would threaten
its ability to renew contracts with other distributors.

A lawsuit, which also charges breach of contract, was filed earlier this week
in U.S. District Court in Los Angeles.

The suit was filed by International Family Entertainment Inc., parent of the
former Fox Family Channel, which was renamed ABC Family by new owner The Walt
Disney Co.

ABC Family stands to lose 6.5 million of its 83.5 million homes if it is

EchoStar spokesman Marc Lumpkin responded to the lawsuit by saying, 'ABC
Family's claims are without merit and we stand firm in our belief that we have
the right to discontinue broadcasting ABC Family as of Jan. 1.'

ABC Family has a 10-year affiliation deal with EchoStar's Dish Network -- a
pact that expires in August 2005.

The suit charged that the contract allows either side to terminate the
agreement under limited circumstances, 'and Disney's acquisition of the parent
of IFE's parent is not one of these circumstances.'

If EchoStar drops ABC Family, the network will fall from the 11th
most widely distributed ad-supported network to No. 22, the suit said.

ABC Family claimed that EchoStar wants to drop it due to a ratings decline,
the need for channel space to comply with must-carry obligations and to get
lower license fees.

Technically, Disney acquired Fox Family Worldwide Inc., the sole member of
Fox Kids Holdings, which is the sole shareholder of IFE.

The suit against EchoStar contended that Disney's
purchase of IFE did not result in any change in the entity that holds the
controlling stock and voting interest in IFE, which remains Fox Kids.

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