Ovation TV and Reelz, two struggling TV networks, have gotten a huge boost in Minnesota federal court. Because of a ruling on Thursday concerning a 15-year-old merger agreement, the two networks are virtually guaranteed placement on DirecTV's platform.
The genesis of the dispute—which has been under wraps until late last week—dates back to the late 20th-century during the race to launch satellites into space. At the time, it wasn't so apparent that DirecTV would become the leading satellite TV service, so successful that AT&T now wants to acquire it for $48 billion. Besides competing with the predecessor to Dish Network, DirecTV was also battling United States Satellite Broadcasting ("USSB"), owned by Stanley Hubbard, who had exclusive carriage deals with HBO and Showtime.
DirecTV took care of this in 1999 by merging with USSB in a somewhat unique marriage. Besides $1.3 billion, Hubbard also got a long-term programming agreement to ensure that his family would in the business for "generations." The parties agreed that Hubbard would have a distribution right on up to three networks, but the exact deal was somewhat ambiguous.
During negotiations, Hubbard proposed the right should last in "perpetuity" while DirecTV wanted the right to be limited to seven years. Drafts of the agreement suggest the deal-makers began talking about rights granted "on an ongoing basis," but in the end, DirecTV and Hubbard didn't specify an exact time frame.
Hubbard, though, did get the right on three channels "owned and controlled" by the Hubbard family and their "lineal descendants."
As #1, Hubbard Broadcasting Inc. (HBI) launched the All News Channel, a competitor to CNN. It soon died.
For #2 and #3, Hubbard launched ReelzChannel, whose slogan is "Hollywood happens here," and Ovation TV, which is heavy on arts programming like the competition series The Fashion Fund.
In 2013, seven years after Reelz and Ovation launched, the networks were up for a contract renewal. Hubbard's company says it made numerous proposals to DirecTV, which allegedly wasn't interested in renewing the contract. Instead, it claimed that the old programming agreement with Hubbard was "no longer valid." On the verge of having its networks dropped last September, Hubbard filed a lawsuit.
Rest of Article: hollywoodreporter.com
The genesis of the dispute—which has been under wraps until late last week—dates back to the late 20th-century during the race to launch satellites into space. At the time, it wasn't so apparent that DirecTV would become the leading satellite TV service, so successful that AT&T now wants to acquire it for $48 billion. Besides competing with the predecessor to Dish Network, DirecTV was also battling United States Satellite Broadcasting ("USSB"), owned by Stanley Hubbard, who had exclusive carriage deals with HBO and Showtime.
DirecTV took care of this in 1999 by merging with USSB in a somewhat unique marriage. Besides $1.3 billion, Hubbard also got a long-term programming agreement to ensure that his family would in the business for "generations." The parties agreed that Hubbard would have a distribution right on up to three networks, but the exact deal was somewhat ambiguous.
During negotiations, Hubbard proposed the right should last in "perpetuity" while DirecTV wanted the right to be limited to seven years. Drafts of the agreement suggest the deal-makers began talking about rights granted "on an ongoing basis," but in the end, DirecTV and Hubbard didn't specify an exact time frame.
Hubbard, though, did get the right on three channels "owned and controlled" by the Hubbard family and their "lineal descendants."
As #1, Hubbard Broadcasting Inc. (HBI) launched the All News Channel, a competitor to CNN. It soon died.
For #2 and #3, Hubbard launched ReelzChannel, whose slogan is "Hollywood happens here," and Ovation TV, which is heavy on arts programming like the competition series The Fashion Fund.
In 2013, seven years after Reelz and Ovation launched, the networks were up for a contract renewal. Hubbard's company says it made numerous proposals to DirecTV, which allegedly wasn't interested in renewing the contract. Instead, it claimed that the old programming agreement with Hubbard was "no longer valid." On the verge of having its networks dropped last September, Hubbard filed a lawsuit.
Rest of Article: hollywoodreporter.com
