Dish HD vs Disney (DISH sort of won...)

[eurosport]

Will be much harder to find Phineas & Ferb way up there.

Even if they put it on channel 53,429 my daughters will STILL find
Phineas & Ferb!
LOL

 

[wallyhts]

I really hope Charlie holds out and does not cave in.
Carriage agreement rates are out of control.
We should have choices and should not be controlled by the programmers.

 

[Islandguy43]

I really hope Charlie holds out and does not cave in.
Carriage agreement rates are out of control.
We should have choices and should not be controlled by the programmers.

Yep just like the great job he had done holding out for YES, MLB.Net and with the Dolans over the HD versions of their channels, and now Disney/ESPN. Just wait until Comcast owns NBC, and see what happens when he tries to play hardball with them.

 

[Greg Bimson]

As with many of the threads you've started recently (Goaliebob) you have no clue what E* is doing. So give it a rest w/ your speculation. I don't know you don't only a very few insiders know for sure what is going on. And none of those people are saying anything especially to you or on the forums.

I've been able to glean a bit more information about the case.

Simply put, the case was started on 30 January, 2008. This was before the four disputed HD channels ever launched. Dish Network felt the THREE contracts with Disney subsidiaries allowed for carriage of the four disputed HD networks for free, and Dish Network turned most (if not all) of them on in May 2008.

Disney countersued Dish Network for consistently paying their bills late. Disney believed they were entitled to interest payments with respect to the terms of the existing carriage agreement.

So, long story short, the court decision is as follows:

1) Dish Network did not have the right to carry the four disputed channels. According to the court decision, Disney wasn't going to let Dish Network rebroadcast those channels at all.

2) Dish Network did pay their bills late, and the $65 million is interest for those late payments.

3) Most importantly, none of this addresses any payments due to Disney for carrying the four disputed HD channels for 25 months.

I will retract my statement about Disney asking Dish Network to shut-down those four disputed HD channels. As Disney won a court case and still has not received a dime for those channels, Disney may have in fact asked Dish Network to disable. After all, Dish Network is now appealing the decision so Disney has yet to receive a dime from this dispute.

However, if Dish Network wants to carry these channels, keep in mind that Disney would expect:

Resolution on the $65 million in restitution for interest payments ordered by the court
Resolution on the fees for the four disputed channels carried without contract for the past 25 months
Forward carriage payments for these four channels (if Disney does want Dish Network to carry them)

I'll agree with goaliebob that this just doesn't look like it will be settled quickly, as Disney is holding most of the cards in this negotiation.

 

[lparsons21]

Reading here and in other places, as well as casual conversations with friends about this issue, it is surprising that most don't seem to care at all other than noticing it. Maybe because HD on those channels isn't all that great to begin with, or not of much value in the case of ESPN News.

 

[whatchel1]

after the fact

I've been able to glean a bit more information about the case. I'll agree with goaliebob that this just doesn't look like it will be settled quickly, as Disney is holding most of the cards in this negotiation.

Can't say I agree or disagree w/ Gb on this. Thing is Disney was kinda playing both ends against the middle They gave E* the right to turn on the channels by supplying them. Then Disney seems to have decided in the NY court that that wasn't enough that they needed more $$ for these chs. So whose right & whose wrong only the courts will decide. Now will Disney agree to turning the encoders back on will the case is on going don't know. Does anyone else, nope. So it will go on until a final decision is made. Personally I hope that Disney gets it's butt in a sling for playing fast & loose w/ charging different amounts to different companies. D* was getting a much better price than E* so that's when the S*** started hitting the fan.

 

[mike123abc]

It could be that Disney allowed the disputed channels to air on Dish until it was resolved in court to avoid any possible damages on their side for not supplying the programming as Dish claimed was required under contract. They probably figured they would just get the money eventually anyways when the suit was over.

Dish and Disney are probably negotiating the carriage prices and I am sure Disney wants payments for all the months that they provided the signal out of good will during the lawsuit.

 

[Greg Bimson]

They gave E* the right to turn on the channels by supplying them. Then Disney seems to have decided in the NY court that that wasn't enough that they needed more $$ for these chs.

This is actually reversed...

Dish Network sued Disney in January 2008 because Disney was not going to provide these channels to Dish Network. Those channels finally launched in May 2008.

Dish Network's complaint was dismissed. It means that Disney did not have to provide those channels to Dish Network. That was Disney's contention from the moment the suit was filed.

The question in my mind is how did Dish Network provide those channels to customers? I do agree with mike123abc that the disputed channels were probably allowed by Disney in case Disney was held liable, but under what type of an agreement?

Personally I hope that Disney gets it's butt in a sling for playing fast & loose w/ charging different amounts to different companies. D* was getting a much better price than E* so that's when the S*** started hitting the fan.

Well, that also happened to be addressed in the suit. From how I read it, DirecTV wasn't getting a much better price. It was that they were going to carry the four channels in HD, and because Dish Network wasn't going to receive them Dish Network felt Disney violated the most-favored nation clause.

The courts ruled that Disney didn't violate the most-favored nation clause.

 

[Laddyboy]

This is actually reversed...

Dish Network sued Disney in January 2008 because Disney was not going to provide these channels to Dish Network. Those channels finally launched in May 2008.

Dish Network's complaint was dismissed. It means that Disney did not have to provide those channels to Dish Network. That was Disney's contention from the moment the suit was filed.

The question in my mind is how did Dish Network provide those channels to customers? I do agree with mike123abc that the disputed channels were probably allowed by Disney in case Disney was held liable, but under what type of an agreement?Well, that also happened to be addressed in the suit. From how I read it, DirecTV wasn't getting a much better price. It was that they were going to carry the four channels in HD, and because Dish Network wasn't going to receive them Dish Network felt Disney violated the most-favored nation clause.

The courts ruled that Disney didn't violate the most-favored nation clause.

OK I'm confused now. E* has the contractural rights to retrans the SD channels but Disney wasn't going to allow E* to retrans the HD channels, but was going to allow D* the HDs. What purpose would be served by Disney not granting E* permission to broadcast the HD equivalents? Is that even within the law to favor one DBS company over the other? If that is the case, the providers could put either DBS company out of business by simply not allowing any retrans contracts. I would think that might bump up against antitrust provisions by reducing competition. If you offer to sell to one, don't you also have to sell to the other.

 

[Greg Bimson]

Maybe there is an offer to sell. We don't know. All we know is that Dish Network sued Disney for failure to provide "certain feeds" of channels that Dish Network believed they were entitled to.

Now that the dust has settled on the "trial", Disney is stating Dish Network never did have an agreement to provide these channels without compensation. Disney even left the door open to negotations. Dish Network never admits culpability in their release, but does simply mention they are trying to keep rates low because of their HD for Life promotion.

Seems there may have always been wriggle room.

Maybe Disney pulled a "Dish Network" and went into the negotiation that they weren't going to provide those HD channels; maybe Disney would have relented if the right price could be struck. After all, Disney was not happy that Dish Network couldn't pay their bills on time. And since Dish Network went the lawsuit route, Disney simply extracted more blood from a stone by countersuing and winning regarding late payment interest on retransmission fees.

 

[whatchel1]

What I thought

OK I'm confused now. E* has the contractural rights to retrans the SD channels but Disney wasn't going to allow E* to retrans the HD channels, but was going to allow D* the HDs. What purpose would be served by Disney not granting E* permission to broadcast the HD equivalents? Is that even within the law to favor one DBS company over the other? If that is the case, the providers could put either DBS company out of business by simply not allowing any retrans contracts. I would think that might bump up against antitrust provisions by reducing competition. If you offer to sell to one, don't you also have to sell to the other.

This is what I thought too. Greg is saying other wise. So I'm confused too.

 

[Laddyboy]

The whole thing seems a mess. I just don't see any advantage to Disney withholding channels from E* unless of course E* doesn't want to pay. That assumes others - D*, Comcast, etc. - also are paying separately for HD equivalents from Disney.

 

[whatchel1]

may be the whole thing

The whole thing seems a mess. I just don't see any advantage to Disney withholding channels from E* unless of course E* doesn't want to pay. That assumes others - D*, Comcast, etc. - also are paying separately for HD equivalents from Disney.

That may be what the whole thing comes down to are they or aren't they.

 

[Greg Bimson]

This is the paragraph from the decision issued 23 March 2010:

According to EchoStar, other distributors, in the same territory as EchoStar, announced that defendants would be providing the following "simulcast" feeds of the following Networks: "Disney Channel HD," "Toon Disney HD," "ABC Family HD," and "ESPNews HD" (collectively, the "Disputed HD Programs"), but defendants indicated to EchoStar that they will not be providing the Disputed HD Programs to EchoStar.​

This is the following paragraph:

In bringing this action, EchoStar contends that the defendants breached the three license agreements by failing to provide it with the same high definition feeds of defendants' network programming that they provide to other cable, satellite, residential wireless or wireline distributors in the USA and its territories.​

So obviously, it was Dish Network's contention the four channels are covered by the three existing agreements, and it was Disney's contention they weren't.

So if Dish Network wants to negotiate for them, I can only assume it would be fine with Disney. Disney even said so in their press release.

 

[godwheel]

Maybe you guys can help me out.

I'm currently a TurboHD Bronze DISH subscriber. I have another 6 months of contract with DishHD. However, I signed up for DISH because they had the DisneyHD channel available in this package. However, now they won't even offer it to me on SD without me having to pay more to move to another package.

That doesn't seem right to me.

What course can I take at this point? Shouldn't they do right by their consumer and try to accommodate me in some bracket that provides me with that channel at least until my contract is up? They can then try to charge me more, I won't care because at that point I can cancel.

Can someone opt out of the contract under these circumstances?

Thanks I appreciate it.

 

[Laddyboy]

Maybe you guys can help me out.

I'm currently a TurboHD Bronze DISH subscriber. I have another 6 months of contract with DishHD. However, I signed up for DISH because they had the DisneyHD channel available in this package. However, now they won't even offer it to me on SD without me having to pay more to move to another package.

That doesn't seem right to me.

What course can I take at this point? Shouldn't they do right by their consumer and try to accommodate me in some bracket that provides me with that channel at least until my contract is up? They can then try to charge me more, I won't care because at that point I can cancel.

Can someone opt out of the contract under these circumstances?

Thanks I appreciate it.

Probably cannot opt out as the agreement you signed says E* can change programming. I thought Scott said E* was making the SDs available to Dish America subs. Do you have your guide set to HD only? If so, change it to all subscribed and see if you have it in SD. Maybe run a check switch to get the updated guide.

 

[Laddyboy]

This is the paragraph from the decision issued 23 March 2010:

According to EchoStar, other distributors, in the same territory as EchoStar, announced that defendants would be providing the following "simulcast" feeds of the following Networks: "Disney Channel HD," "Toon Disney HD," "ABC Family HD," and "ESPNews HD" (collectively, the "Disputed HD Programs"), but defendants indicated to EchoStar that they will not be providing the Disputed HD Programs to EchoStar.
​

This is the following paragraph:

In bringing this action, EchoStar contends that the defendants breached the three license agreements by failing to provide it with the same high definition feeds of defendants' network programming that they provide to other cable, satellite, residential wireless or wireline distributors in the USA and its territories.
​

So obviously, it was Dish Network's contention the four channels are covered by the three existing agreements, and it was Disney's contention they weren't.

So if Dish Network wants to negotiate for them, I can only assume it would be fine with Disney. Disney even said so in their press release.

This still doesn't get to the issue as to whether Disney is providing the HD feeds for no additional costs to these other competitors. If they are charging them for the HD feeds, it's one thing; if not, it's another.

 

[Greg Bimson]

This still doesn't get to the issue as to whether Disney is providing the HD feeds for no additional costs to these other competitors. If they are charging them for the HD feeds, it's one thing; if not, it's another.

Well, I don't necessarily understand...

If Comcast, DirecTV and Time Warner all renegotiated their contracts with Disney to provide these four channels to their customers, then obviously they have the right to rebroadcast those channels.

Also from the court case:

The second cause of action is based on section 13 (the "Most Favored Nation provision") of the ESPN Agreement. It alleges that defendants breached tha section by providing a lower "Net Effective Rate" and "More Favorable Provisions" to other distributors for ESPNU and ESPN Deportes than provided to EchoStar, and EchoStar is entitled to the same More Favorable Provisions regarding ESPN Deportes and ESPNU, including receiving "HD feeds".

EchoStar alleges that it pays the same license fee rates for ESPN Deportes and ESPNU as defendants; other top three distributors, but those other distributors receive these network as well as the Disputed HD programming, whereas EchoStar receives only ESPN Deportes and ESPNU. Therefore, the other distributors are treated more favorably and pay a lower "Net Effective Rate" than EchoStar, which, allegedly, is entitled to the same rate plus any "in-kind consideration" or "more favorable provision."

Defendants argue that section 13 does not apply to the Disputed HD Programming, and tat, even if it did, the terms are actually more favorable to the defendants, not to the other distributors. They contend that the Most Favored Nation provision relates only to rates and packaging obligations, and cannot be read to encompass all terms and conditions, i.e., an agreement with another distributor that includes the Disputed HD Programming, see Affadavit of David C. Preschlak, ¶ 10.

Defendants' contention is persuasive. The plain language of the section indicates that this Most Favored Nation provision was not meant to encompass agreements with other distributors, and therefore, resort to extrinsic evidence is unnecessary. [citiation redacted] Section 13 pertains to (1) a lower "Net Effective Rate" or (2) "more favorable packaging rights or obligations." Examples of the latter include the "ability to distribute a Network on an a la carte basis," and "removing the obligaton to distribute a Network on Basic or Expanded Basic tiers and/or the availability of multi-package distribution of a Network such as, for example, on a cable television system's Expanded Basic tier and a separate sports tier." EchoStar does not appear to argue that any of these are relevant.​

If Dish Network wanted the programming, they needed to contract for it. Trying to save their customers (or more technically, themselves) money by suing on the basis that other have programming we want but we won't contract for it is going to end up costing more in the long run.

 

[dvrexpander]

Although I'd like to see all the channels come back I would give them up in a heart beat for ESPNU HD!!!!!! I DO NOT want to see this come in on a damn sports package either!! I'd be total pissed to have to pay a big amount just for one damn channel!! :rant:

 

[TheKrell]

They contend that the Most Favored Nation provision relates only to rates and packaging obligations, and cannot be read to encompass all terms and conditions, i.e., an agreement with another distributor that includes the Disputed HD Programming, see Affadavit of David C. Preschlak, ¶ 10.

I am not disputing what the affadavit says, nor the court's interpretation, nor your reporting of it. But this statement does utter and complete violence to common sense. If a "Most Favored Nation" provision doesn't apply to your rates and packaging obligations vis a vis other nations (i.e. other distributors), then what in hell does it apply to? Outrageous miscarriage of justice IMHO.

As Laddyboy said, this all depends on whether or not Disney was giving other distributors access to these HD channels for free, or rather was charging for them. Dish appears to think that the other guys were getting them for free (along with the paid SD feeds).