Dish Network settles lawsuit with Cablevision, AMC

NEW YORK Sun Oct 21, 2012 5:30pm EDT

NEW YORK (Reuters) - Dish Network, the nation's third largest pay-TV provider, has settled its four-year old lawsuit filed by Cablevision and AMC Networks over a high-definition programming agreement, according to statements from the companies released on Sunday.

As a result of the settlement, Dish will resume broadcasting AMC's channels.

Voom HD Holdings, then a unit of Cablevision, had sued Dish Network for $2.4 billion in damages alleging it violated a 15-year contract to carry a suite of high-definition channels, including those devoted to Kung Fu and video games. Dish pulled out these channels in 2008.

Voom is now a part of AMC Networks, which Cablevision spun off last year.

Under the deal, Dish will pay a cash settlement of $700 million to Cablevision and AMC, according to a statement from Cablevision. Some $80 million of that cash settlement would be intended for the purchase of Cablevision's wireless spectrum licenses in 45 cities in the United States. Dish said that covers a population of 150 million in cities such as New York, Los Angeles, Chicago, San Francisco and Philadelphia.

Dish and its sister company EchoStar led by billionaire chairman Charlie Ergen have spent several billion dollars on acquiring wireless spectrum. Ergen plans to use the assets to build a mobile network once the U.S. Federal Communications Commission gives it approval.

As part of the settlement, Dish will also enter into a long-term distribution agreement with AMC Networks to carry AMC, IFC, Sundance Channel and WE tv, and with The Madison Square Garden Company to carry Fuse on its satellite service.

Dish, in a statement, said it resumed broadcasting the AMC channel on Sunday, October 21. The AMC channel will be carried on Dish channel 131.

Other AMC Networks programming, including Sundance Channel, WE tv and IFC, will return to Dish on November 1, Dish said. The Madison Square Garden Company's music-oriented Fuse channel will begin broadcast November 1, as well.

"This multi-year deal delivers a fair value for both parties and includes digital expansion opportunities for AMC Networks' programming," said Dave Shull, senior vice president of Programming at Dish.

Dish, then a part of Echostar, owned a 20-percent stake in Voom, but was giving that up to Rainbow Programming Holdings, a unit of Cablevision. Dish, as a result, will not retain any of that $700-million settlement.

Dish in July blacked out AMC's networks for its 14 million subscribers, saying the channels did not generate ratings large enough to justify the licensing fee increases AMC was seeking in a new contract. Dish customers account for 13 percent of AMC's subscriber base.

AMC maintained, however, that Dish dropped its channels to gain negotiating leverage in the Voom case and said the two companies had never discussed a new carriage agreement.

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Liana Baker in Chicago; Editing by Marguerita Choy)

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