In a major blow to Rainbow Media Holdings LLC’s AMC, a New York State Supreme Court judge ruled Friday that Time Warner Entertainment LLC is within its contractual right to terminate its current carriage deal with American Movie Classics Co. (AMCC) due to the network’s changeover to a more contemporary movie format.
Judge Bernard Fried ruled in favor of Time Warner’s December 2003 suit against AMC, which claimed that the network’s decision to move from offering classic movies to more contemporary film titles violated its long-term carriage agreement with the MSO.
AMCC had sued Time Warner one month earlier to stop the MSO from dropping the service at the end of 2003 or renegotiating a new, lower rate per subscriber.
AMC initially said Time Warner's move to drop the network was nothing more than a smoke screen to leverage a deal with AMC's sister regional sports services, Madison Square Garden Network and Fox Sports New York. But Time Warner this past May reached long-term carriage deals with both networks.
In a prepared statement, Time Warner Cable said it is “gratified that the Supreme Court of the State of New York has held American Movie Classics to the contractual commitments it made to us. We are presently evaluating our relationship with the network going forward.”
An AMC spokesman said it would appeal the ruling, adding that it would not change the quality of programming subscribers have come to expect from AMC.
“We are optimistic that the ruling will be overturned,” the spokesman said.