EchoStar Communications Corp., not afraid to take on programmers in public over license-fee increases, has made peace with Turner Broadcasting System Inc., agreeing to a new deal after months of tense talks.
On the eve of the National Show — timing that would make any nasty flareups especially uncomfortable for both sides — the operator of the Dish Network direct-broadcast satellite platform and Turner said they agreed on a contract renewal that covers Cable News Network, CNNfn, Headline News, Boomerang, Cartoon Network, Turner Classic Movies and Turner South.
EchoStar and Turner announced last Thursday that they had reached an agreement in principle and were working out the details for a signed deal at presstime last Friday. Neither side would discuss the terms of the deal.
Among distributors, EchoStar and its chairman, Charlie Ergen, haven’t been shy about duking it out with programmers. At one point, EchoStar’s dispute with Turner looked like it was going to duplicate the company’s March fight with Viacom Inc. In that brouhaha — over rate hikes and carriage of Nicktoons — Dish Network dropped CBS-owned TV stations and MTV Networks cable channels for 48 hours.
Back in 2002, EchoStar threatened to drop ABC Family and was sued by the programmer. Both sides eventually settled their differences, and ABC Family remained on Dish’s lineup.
“Whether you like him [Ergen] or not, you have to hand it to him: He’s one gutsy guy,” said one cable-network chief who didn’t want to be identified.
The old carriage deal between EchoStar and Turner expired Dec. 31. A contract extension was set to expire last Friday.
Both sides kept talking during the extension, and the Turner services remained on EchoStar’s Dish Network, which serves 9.4 million subscribers.
Back in March, when EchoStar dumped its networks, Viacom mounted an aggressive ad campaign against the DBS provider, with print ads talking about how EchoStar yanked Nickelodeon’s SpongeBob SquarePants off the air.
EchoStar and Viacom soon settled their dispute, and the DBS provider did capitulate and agree to carry Nicktoons. The programmer was largely deemed the victor in the skirmish, with Merrill Lynch estimating EchoStar would be paying annual rate hikes in the 7 to 8% range.
“They [EchoStar officials] realize they got out-pressed and out-marketed, but they were up against the most savvy of those kinds of fighters,” one cable veteran said.
Last month, during his televised “Charlie Chat” on April 12, Ergen hinted that he might also have to drop Turner’s networks when he talked about the ongoing contract negotiations.
“I think we can get it done, but I want you to be prepared,” Ergen told subscribers.
EchoStar claims it is being unfairly squeezed when it comes to programming costs.
“For EchoStar, the biggest issue is the 'premium’ that programmers have historically expected us to pay,” spokesman Steve Caulk said. “At this stage in our growth, with more than 9.4 million subscribers, we expect to get the same kind of treatment that programmers have offered smaller companies, with comparable rates.”