EchoStar Sues TV Azteca Over Exclusivity Breach

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The country's top two direct-broadcast satellite companies may be planning to merge their operations by year's end — if given the government go-ahead — but that hasn't stopped EchoStar Communications Corp. from trying to guard some of its exclusive ethnic programming from DirecTV Inc.

EchoStar spokesman Marc Lumpkin confirmed last week that the company filed suit June 25 against TV Azteca SA for breach of contract, after attempts to resolve the disagreements out of court proved unsuccessful.

Lumpkin would not disclose details of the suit, saying the terms were under seal by the courts.

Although EchoStar filed suit against TV Azteca, the Spanish-language network that originates from Mexico City, it's still offered on EchoStar's Dish Latino programming lineup.

In a research report issued last Wednesday, UBS Warburg analyst Aryeh Bourkoff said EchoStar charged TV Azteca with violating an exclusivity clause in its multiyear contract to carry the Mexican network's programming as part of its DBS packages.

According to a TV Azteca Securities & Exchange Commission filing, EchoStar is seeking a restraining order and preliminary injunction that would prevent TV Azteca from distributing programming from its flagship channel to U.S. cable or satellite providers that compete with EchoStar.

The UBS Warburg report noted that TV Azteca interprets its exclusivity provision to mean it can redistribute its Channel 13 programming to U.S. broadcast affiliates 30 days after EchoStar delivers those shows.

Early this year, DirecTV began offering a Los Angeles-based broadcast affiliate of TV Azteca spin-off Azteca America to comply with government mandated must-carry requirements in markets where the DBS company offers local-into-local programming packages. In January, DirecTV Para Todos — the DBS provider's bilingual programming service — began promoting the availability of the popular TV Azteca programming to the large base of Mexican-Americans resideing in the Los Angeles area.

The TV Azteca and Azteca America feeds are not identical, but the U.S TV stations carry much of the same programming that TV Azteca produces in Mexico.

DirecTV also carries an Azteca America affiliate in the San Francisco/San Jose market, said DirecTV spokesman Robert Mercer. The company plans to add the local broadcast affiliate from Houston once that station can provide a quality signal.

In a statement from TV Azteca's Web site, the company said Azteca America has asked distribution partner Pappas Telecasting Cos. and its stations to "withdraw their must-carry election for satellite transmission of Azteca America programming on DirecTV, in order to avoid a possible conflict with EchoStar, but Pappas has not as yet complied with this request. The parties are actively pursuing resolution of these issues."

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