ABC Family Sues to Bar DBS Drop

Author:
Updated:
Original:

ABC Family, which finally revealed a January programming lineup heavy on repurposed fare from the ABC Network, wants a court to bar EchoStar Communications Corp. from dropping it effective Jan. 1.

Meanwhile, DirecTV Inc. — which EchoStar has made a $25.8 billion bid to acquire — is also making noise about dropping ABC Family by the New Year.

The network filed suit against EchoStar in U.S District Court in Los Angeles last Tuesday, contending that the loss of carriage on the digital-broadcast satellite provider would also threaten its ability to renew contracts with other distributors.

The lawsuit, which also charges breach of contract, 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, which has a 10-year affiliation deal with EchoStar's Dish Network — a pact that expires in August 2005 — claimed in the suit that the DBS company 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.

The suit against EchoStar also argues 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. EchoStar had contended that Disney's purchase of ABC Family made its current deal obsolete because the network changed ownership.

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

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

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 stands to lose 6.5 million of its 83.5 million homes if EchoStar drops it. But it could lose another 10 million subscribers if fellow DBS provider DirecTV decides to also drop the service.

While DirecTV executives would not comment, sources close to the situation said the DBS provider is seriously considering pulling the plug on the revamped service, citing the network's change of ownership.

"It's an issue that's on the table, but no decisions have been made," said a source close to the situation.

Though EchoStar president Charlie Ergen may believe he's within his rights to drop ABC Family, some industry observers believe that the flap may reflect poorly on the EchoStar/DirecTV merger in the eyes of the Justice Department, which will review the deal.

"Obviously, it's bad timing vis-a-vis the merger, because it can be criticized as showing how EchoStar wields power," The Carmel Group chairman and CEO Jimmy Schaeffler said. "On the other hand, if it's a bad deal, it's a bad deal, and business continues, despite the merger. Our whole TV system is based on ratings equaling value and worth, so if the ratings are down, there's a good argument the prices should come down."

FROM NO. 11 TO NO. 22

If EchoStar drops ABC Family, the network will fall from the 11th most widely distributed ad-supported network to No. 22, the suit said. The drop would be even more precipitous if DirecTV were to drop the service.

On the programming front, ABC Family will mix movies and specials with a sketch comedy series from ABC Network to program its primetime lineup in January.

Whose Line Is It Anyway
— the improvisational half hour comedy series hosted by Drew Carey —will anchor ABC Family's primetime lineup with back-to-back half-hour episodes at 10 p.m. and 10:30 p.m.

ABC announced last week that Whose Line
will be preceded at 8 p.m. by movies and specials, including a Jan. 19 reairing of Brian's Song, the remake of the 1971 telefilm that recently appeared on ABC's "Wonderful of Disney" showcase. Other films that will unreel on ABC Family next month: the primetime basic cable premiere of Prelude To a Kiss
(Meg Ryan and Alec Baldwin) on Jan. 13; and the basic cable premiere of Jack
(Robin Williams) on Jan. 14.
Jennifer Lopez in Concert, the music special that recently aired on NBC, is slated to run on Jan. 18.

The network will lead into primetime with back-to-back, half-hour episodes of ABC's America's Funniest Home Videos, hosted by Daisy Fuentes, at 7 p.m.

ABC Family kicks off the New Year with a 10-hour marathon of the broadcast network's freshman series Alias
from noon to 10 p.m.

While ABC Family, as expected, will re-air a good amount of ABC programming in the evening next month, Fox Family fare will run from 7 a.m. to 7 p.m.

Sources said Fox Family's programming, including Angela Anaconda, S Club 7, Step by Step
and The Wonder Years, will remain largely intact during those hours — at least during January.

The second season of State of Grace, Fox Family's highly acclaimed coming of age series, is expected to debut in either February or March, according to sources.

Related