Time Warner Slaps Countersuit on AMC - Multichannel

Time Warner Slaps Countersuit on AMC

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Time Warner Entertainment L.P. late Thursday filed a countersuit against American Movie Classics Co. alleging that it is within its contractual right to terminate its current AMC carriage deal.

The suit, filed in New York State Supreme Court, countered an AMCC suit filed Nov. 14 against Time Warner Cable seeking to bar the MSO from terminating its carriage agreement with AMC Dec. 31 due to on-air changes that the former classic-movie channel has undergone.

AMC claimed that Time Warner Cable’s move was nothing but a smokescreen to leverage a deal with the network’s sister regional sports network.

AMCC was seeking at least $250 million in lost affiliate fees and advertising revenue if the service was terminated. TWE is asking for a dismissal of the complaint; for AMCC to deliver American Movie Classics in both name and substance, as provided under the original agreement; and for other financial relief.

But TWE’s countersuit denied any attempt to use the AMC deal as a catalyst for negotiations for other networks and claimed that AMC is no longer the classic-movie service it renegotiated a long-term carriage deal for in 2000.

According to the suit, TWE alleged that AMCC breached its contract that stated that AMC would consist of "classic motion-picture films" and related programming. In recent years, the network has added more contemporary movies, such as Alien Resurrection and An American Werewolf in Paris,as well as original specials and series.

As a result, Time Warner Cable Sept. 30 gave AMCC 90 days’ notice that it would drop AMC or renegotiate a new, lower rate per subscriber. The MSO also proposed offering AMC on a "lower-penetrated tier" consistent with the proposed positioning for AMCC’s digital AMC Hollywood Classics service.

TWE also claimed that a "senior" AMCC official at this past June’s National Show "conceded" that AMC’s transformation resulted in a "minor breach" but asserted that Time Warner Cable was "using the breach as leverage."

"Their response is just an irrelevant smokescreen in their ongoing campaign to create phony leverage that doesn't exist," AMCC countered in a prepared statement. "Time Warner Cable is engaged in an illegal attempt to break its contract with AMC, which extends through 2008. We are confident that we will win in the courts."

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