DISH -VS- VOOM - A Settlement has been reached!

[NotMe546]

If the contract is "ambiguous" then the courts must reply on what both parties reasonably understood the contract to mean. In this case, everything hinges on the accounting methods used by VOOM to meet the 100M spend requirement. From everything I have seen so far (EchoStar's audit findings in October 2007, VOOMs financials and accounting artifacts provided to EchoStar, the court's imposed sanctions (spoilage of evidence) and interpretation of, at least, some of the financials...well, you gotta conclude this matter is going to come out in VOOMs favor. I'm not going to belabor the point, but everything VOOM has claimed back in 2008 has not been disputed by the evidence we've seen. The only issue (to me) is how much this matter is going to cost Dish...100M?...500M...1000M...or 1500M? I have no idea.

That sucks!!!

 

[jacmyoung]

If the contract is "ambiguous" then the courts must reply on what both parties reasonably understood the contract to mean. In this case, everything hinges on the accounting methods used by VOOM to meet the 100M spend requirement. From everything I have seen so far (EchoStar's audit findings in October 2007, VOOMs financials and accounting artifacts provided to EchoStar, the court's imposed sanctions (spoilage of evidence) and interpretation of, at least, some of the financials...well, you gotta conclude this matter is going to come out in VOOMs favor. I'm not going to belabor the point, but everything VOOM has claimed back in 2008 has not been disputed by the evidence we've seen. The only issue (to me) is how much this matter is going to cost Dish...100M?...500M...1000M...or 1500M? I have no idea.

I don't know enough about this case to speculate the outcome, the only thing I can say is, if indeed the court has determined the contract is ambiguous, it would be difficult for the court to enforce an ambiguous contract.

 

[rjfrandle]

Maybe Ace and Gary can figure it out.

 

[TheKrell]

I fail to see why Echostar internal email, or any prejudice within Echostar toward Voom, has any bearing on this case. (But I'm no lawyer.) What Echostar was thinking, and what they did while discussing the matter amongst themselves, hardly forced Voom to spend such exhorbitant sums on their own execs. Are they in breach of their contact, or was Echostar in breach by pullling those channels? Internal email seems to me irrelevant to this case. If airing everybody's dirty laundry is just fine and even mandated these days by the courts, it just forces execs in any major corporation to speak softly within their board rooms and leave no paper trail whatsoever.

 

[Hall]

I fail to see why insert-any-company-here internal email, or any prejudice within Echostar toward Voom, has any bearing on this case. (But I'm no lawyer.) What Echostar was thinking, and what they did while discussing the matter amongst themselves, hardly forced Voom to spend such exhorbitant sums on their own execs...

If airing everybody's dirty laundry is just fine and even mandated these days by the courts, it just forces execs in any major corporation to speak softly within their board rooms and leave no paper trail whatsoever.

Ever heard of Sarbanes-Oxley or "SOX" ? It's a law passed by the federal government in response to the Enron scandal (and others). Welcome to corporate America of today.... For what it's worth, telephone conversations - at least for the time being - are exempt from the "record-keeping" aspects of SOX.

 

[riffjim4069]

I fail to see why Echostar internal email, or any prejudice within Echostar toward Voom, has any bearing on this case. (But I'm no lawyer.) What Echostar was thinking, and what they did while discussing the matter amongst themselves, hardly forced Voom to spend such exhorbitant sums on their own execs...

As Hall pointed out, SOX applies to all publically-traded companies. As such, they had certainly due care obligations to maintain email records and, as the Judge mentioned in his scathing ruling, Dish had a legal obligation to have tagged and retained all VOOM related documents 6-months earlier since they knew this matter was subject to ligitation (i.e., discover). He also mentioned that Dish has a past history of destroying evidence and then claiming, "I didn't know I supposed to retain those records" through some nonsensical legal wrangling by their legal team.

I'm not sure where you're pulling the figures to support your claim that Dish thought VOOM was paying its executives exhorbitant sums of money? Let's face it...almost all the execs make exhorbitant sums of money to include Dish and VOOM. The argument is whether VOOM met the spend limit required by the contract. Dish says they did not because VOOM did not spend 100 million on the service, which they took to mean actual programming costs. VOOM says the 100 million spend limit applies to not only the actual expenses involved with licensing the programming (films, movies, etc.) but the reasonable and customary overhead charges such as employee salaries, administrative expenses, rents, etc. VOOM states the financials/accounting methods were discussed, exchanged, and agreed upon countless times before and after (2+ years) the start of the affiliation agreement.

It's amazing how all these sensitive emails went missing during the time when Dish was plotting its strategy to terminate the affiliation agreement - and the judge mentioned this fact in his ruling. Fortunately (for VOOM), a few incriminating emails were retained by happenstance since they were captured during eDiscovery that involved the emails of certain Dish Network execs in another case.

Again, everything VOOM stated back in May 2008 has not been disputed so far by Dish...has been supported by everything I have read in the documents forwarded to the court...and VOOM has clearly been winning in the courts up to this point. This doesn't mean VOOM didn't do anything wrong since they obviously were also party to this "bad" contract. However, it's now a money grab and most business analysts favor VOOM to come out on top in this case. How big?...500M...1B...more? I have no idea.

Anyway, Dish and VOOM were back in court on the 15th of May. It looks as though they set another trail date of 25 September..and I think Dish has run out of pre-trial appeals.

 

[mike123abc]

If all this email was exchanged and agreed upon with VOOM and Dish then VOOM should have a copy of all this too. It is the internal discussion emails that Dish lost.

Dish essentially accused CVC of just billing VOOM what it thought its services were worth with no accounting of what CVC services VOOM may have actually used. This is the main breaking point of the contract. There is no doubt that Dish wanted out of the contract, and were looking for any loophole. They think they found one in the CVC billing, the initial injunction decision agreed Dish had a good case. Now we will get a trial to see if Dish did have a good case.

This is not a slam dunk case for VOOM in any way shape or form. Now with Dish effectively going to cut 100 million or so a year revenue away from VOOM's parent, even if VOOM wins something, CVC faces a potentially much bigger loss. Dish also owns 20% of VOOM...

 

[riffjim4069]

If all this email was exchanged and agreed upon with VOOM and Dish then VOOM should have a copy of all this too. It is the internal discussion emails that Dish lost.

Dish essentially accused CVC of just billing VOOM what it thought its services were worth with no accounting of what CVC services VOOM may have actually used. This is the main breaking point of the contract. There is no doubt that Dish wanted out of the contract, and were looking for any loophole. They think they found one in the CVC billing, the initial injunction decision agreed Dish had a good case. Now we will get a trial to see if Dish did have a good case.

This is not a slam dunk case for VOOM in any way shape or form. Now with Dish effectively going to cut 100 million or so a year revenue away from VOOM's parent, even if VOOM wins something, CVC faces a potentially much bigger loss. Dish also owns 20% of VOOM...

FYI: VOOM HD was shutdown, assets sold, and accounts liquidated in 2009. Since VOOM HD operated at a loss (the operation lost hundreds of millions) Dish certainly doesn't stand to profit from the operation...especially in light of their terminating the affiliation agreement, coupled with their ownership share included they were responsible for distribution/retransmission of the Voom service, etc.

Several dozen more artifacts were filed with the court two weeks ago (e.g., financials, emails, more depositions, etc.)...although the "juicy" stuff has been sealed. Regardless, VOOM's 5-year budget forecast was posted (critical for estimating damages), VOOM's 5-year plan, and their 2006 proposal made to DirecTV (to show the court they negotiated carriage deals in good faith). Apparently, they proposed a 5 Channel "Best of VOOM" package consisting of Rush HD, Equator HD, Muse HD, Ultra HD and Monsters HD. What's interesting to note is VOOM had forecasted earning something like 300M from Dish in 2012 from subscribers paying $4.36 for VOOM HD.

The bottom line is that Dish customers may be paying for VOOM (AMC, IFC and WE indirectly) without the benefit of having these channels in the lineup. It should be interesting to see what happens when the trial starts on the 25th of September.

 

[bela_blasko2006]

Maybe Voom will win millions and Dish, rather than pay will relaunch some channels. Pipe dream i know but i miss those Voom channels.

 

[Peter Parker]

If DISH loses (or for that matter wins)they have no right to "relaunch" some channels.

 

[Scott Greczkowski]

I like this document...

http://www.satelliteguys.us/attachment.php?attachmentid=78973&d=1341584369

With the best of Voom with only 5 channels. I would pay for that lineup.

 

[whitewolf8214]

I like this document...

http://www.satelliteguys.us/attachment.php?attachmentid=78973&d=1341584369

With the best of Voom with only 5 channels. I would pay for that lineup.

ty Scott for sharing and I would pay for them channels too

 

[Hall]

With the best of Voom with only 5 channels. I would pay for that lineup.

And as I recall, VOOM wasn't interested in offering that to Dish ! They felt they had Dish locked into the contract with ALL of their channels and wouldn't budge. Dish insisted on a smaller package of channels from VOOM, just like VOOM offered DirecTV...

 

[VegasVoomer]

I like this document...

http://www.satelliteguys.us/attachment.php?attachmentid=78973&d=1341584369

With the best of Voom with only 5 channels. I would pay for that lineup.

I'd definitely pay for that lineup. Voom had some of the best PQ channels I've ever seen (Equator comes to mind). I've still got several recordings from Monster.

 

[Bobby]

I'd buy that!

 

[HDRoberts]

I like this document...

http://www.satelliteguys.us/attachment.php?attachmentid=78973&d=1341584369

With the best of Voom with only 5 channels. I would pay for that lineup.

Might this have an impact on the most favored nations portion of the agreement? Sure, Voom may show with this that they made good faith to gain other carriage agreements, but since the Dish contract said they can get any deal other providers get, and they can show they wanted the same 5 channel deal DirecTV was offered, to me that shows BAD faith on the part of Voom.

I'm no lawyer, but this seems significant to me.

 

[Scott Greczkowski]

I think its important to.

DISH wanted to keep 5 channels but VOOM said no, its all or nothing.

But perhaps the folks at VOOM came to their senses after DISH pulled the remaining 5 channels and offered DISH the 5 channel package as well, but by then it was already too late and DISH decided they were not playing with VOOM anymore. I know Charlie said he walked away from the table when Voom threatened them with Legal action for pulling the channels.

 

[riffjim4069]

Initially VOOM tried to schlock their entire 15-channel lineup but nobody had the bandwidth and/or wanted to pay what Dish was paying. If DirecTV would have signed-up for the 5 channel "Best of Voom" package then VOOM would have been obligated to offer Dish the same deal (i.e., Most Favored Nation) according to the affiliation agreement. To be honest, if someone like DirecTV or Comcast would have subscribed to the "Best of Voom" package then perhaps VOOM may have managed to gain a foot hold. I really like the Best of Voom package, but such is life. Ultimately VOOM decided to bleed Dish, and Dish signed a bad contract that allowed VOOM to bleed them for 15-years. In retrospect, there should have been additional incentives in the agreement for both parties to act in good faith. C'est la vie!

Hmmm. If you really thing about...DirecTV killed VOOM!!!

And as I recall, VOOM wasn't interested in offering that to Dish ! They felt they had Dish locked into the contract with ALL of their channels and wouldn't budge. Dish insisted on a smaller package of channels from VOOM, just like VOOM offered DirecTV...

I think its important to.

DISH wanted to keep 5 channels but VOOM said no, its all or nothing.

But perhaps the folks at VOOM came to their senses after DISH pulled the remaining 5 channels and offered DISH the 5 channel package as well, but by then it was already too late and DISH decided they were not playing with VOOM anymore. I know Charlie said he walked away from the table when Voom threatened them with Legal action for pulling the channels.

 

[JM42]

Hmmm. If you really thing about...DirecTV killed VOOM!!!

They may have sped things up a little, but Voom would have died in any event. I don't mean to belittle the content, but Voom was born when there was a vacuum of HD content. I don't think it would have held up as a premium, even as a 5 channel package, as other HD content went wide.

 

[riffjim4069]

They may have sped things up a little, but Voom would have died in any event. I don't mean to belittle the content, but Voom was born when there was a vacuum of HD content. I don't think it would have held up as a premium, even as a 5 channel package, as other HD content went wide.

You hit the nail on the head...Dish agreed to pay a premium price for VOOM and 3-years into the agreement HD was now mainstream. I think Dish thought that VOOM (aka Rainbow Media) would eventually mass-market the VOOM HD channels like they did with AMC, IFC and WE which meant getting rid of the 15-channel "all of nothing" mentality. They didn't, Charlie had a conniption, and the rest is history. It's now a money grab...