By Liana B. Baker
March 4 Viacom Inc Chief Executive Philippe Dauman criticized Cablevision Corp on Monday for filing an "ill-advised and frivolous" antitrust lawsuit against Viacom that he said would just turn into a waste of legal fees.
Dauman's remarks, his first public response to the lawsuit, come a week after Cablevision accused Viacom Inc of illegally forcing it to pay for more than a dozen low-rated cable networks in order to get access to Viacom's most popular channels, including Nickelodeon, MTV and Comedy Central.
"The lawsuit that Cablevision filed is ill-advised and frivolous," Dauman said, speaking at a Deutsche Bank investor conference in Florida.
"The bottom line is that the lawyers will get rich on this," adding that Cablevision's money would be better spent providing its subscribers with better customer service.
A Cablevision spokesman said on Monday that the "tactics employed by Viacom are illegal, anti-consumer, and wrong, and force Cablevision's customers to take and pay for more than a dozen channels they don't want in order to receive the Viacom channels they want."
Last Thursday, Cablevision CEO James Dolan said that Viacom abused its market power, violated federal antitrust laws and "needs to be stopped."
The case represents the latest flare-up in the contentious relationships between distributors and program makers.
Industry observers will be watching to see if the antitrust lawsuit will disrupt the model of selling bundles of cable channels to operators, a practice commonly employed by Viacom and its media company peers in the $97.6 billion cable industry.
Dauman, who was a corporate attorney before he became a media executive, added that 11 of Viacom's networks, including two that Cablevision called ancillary, Nick Jr and Teen Nick, draw higher ratings than MSG, a channel owned by the Dolans, the family that controls Cablevision.
Dauman said that Viacom gave Cablevision concessions and a discount when the two parties negotiated their last carriage deal, which was signed last December. Dauman noted that Cablevision is carrying the same group of networks that it did in their last agreement.
The case is sealed and not yet available to the public. The case is Cablevision Systems Corporation, et al., v. Viacom International Inc, et al., U.S. District Court, Southern District of New York, 13-1278.