Here's a nice "factoid", this time from a Dish filing:
"Echostar's auditors performed and extensive review of [Voom HD] Network's books and records from October 22-26, 2007 at [Voom HD] Network's offices in Long Island. This audit confirmed that ... [Voom HD] Networks had only spent $59.1 million on the service. In addition, even though [Voom HD] Networks claimed that it had "spent" $12 million in overhead allocations form Cablevision and Rainbow Media, [Voom HD] Networks did not give the auditors access to those records and therefore, the auditors could not validate the claim. In view of these finding, EchoStar concuded that [Voom HD] Networks had not spent $100 million on the service, and, therfore, EchoStar had the right to terminate the Agreement."
Even with the $12, that's only $71.1M. Based on my understanding, even if you by the reduction from 21 to 15 channels, that requred them to spend $82M (it was a specified reduction in the agreement, not just a straight redution based on $4.76M/channel)
If you really want people to be the judge, here's as close to the full story as we have: Voom's ammended complaint, and EchoStar's response.
Thanks for the posting! As far as I recall, all court documents were posted in the
First amended complaint filed in Voom vs. Echostar Lawsuit thread. However, that thread has kind of lost steam...and most people like bickering in this one.
Also, VOOM denies the above statement and insists they not only met the Spend requirement, but they exceeded it by millions of dollars:
"As EchoStar is well aware from documentation supplied to it by VOOM HD, VOOM HD in fact spent 102.9 million on VOOM in 2005, not only achieving the requisite threshold, but exceeding it by millions of dollars, if not tens of millions."
"In 2006 alone, VOOM HD spent a total of approximately $102,890,000, almost $3 million more than even EchoStar contends that VOOM HD was required to spend in 2006 and far in excess of its actual spending requirement."
"At the conclusion of the October 2007 audit (the "Audit"), EchoStar's lead auditor, Katherine Knight, found that all matters were in order and raised no issues or concerns."
"Similarly, during negotiations, Rainbow Media furnished EchoStar with budgeted financial information that made clear that while Rainbow Media would spend up to $100 on a 21-channel verision of VOOM, not all of that amount would be spent on "Contractual Rights" and "Programming/Production." The budgeted financial information indicated that spending on the VOOM service would include direct programming expenses, as well as the above described allocations and other legitimate expenses that allowed VOOM HD to operate, product and support its VOOM service."
You know...like salaries and expenses for engineering, operations, marketing, public relations, legal and business staff. I don't know about you, but the last time I purchased a vehicle or poured a glass of water from the spiggot, I was paying for the product, labor, operations, and overhead expenses too. I am not sure where VOOM is getting its 102.9 million, but here are some of the expenses they listed for 2006:
$6.067 million in shared overhead (gotta pay the executives, file SEC reports, information systems must be must be SOX compliant, etc.)
$59.1 in direct programming expenses (licensing fees, production, etc.)
$14.3 in Salaries & Benefits (employees actually enjoy getting paid)
$2.8 million in "On Air Promotions"
$3.2 million in "HD Transfer Costs" (it is hard to have an HD lineup if you don't transfer it to an HD format)
$2.2 million in "Marketing" (doesn't this have a direct benefit to Dish Network...whether they are a provider and business partner?)
$87.667 million already...
