EchoStar, Viacom Resolve Dispute
March 11, 2004
EchoStar Communications has resolved its dispute with Viacom Inc., restoring the 16 Viacom -owned CBS local stations and 10 of its nationally distributed channels after a two-day blackout. Viacom had demanded rate increases of up to 40 percent, increases that EchoStar felt were much higher than the rate of inflation, and that DISH Network carry Viacom-owned channels of little or no interest in exchange for the rights to carry the 16 stations. EchoStar pulled the stations and channels as a result.
Details of the resolution were not readily available, but Viacom seemingly got its way. EchoStar will now carry less popular channels, such as Nicktoons, and CBS is back on DISH Network. Both companies have settled all pending litigation between them, and the term was extended for EchoStar to carry channels such as Spike TV, TV Land and CMT. "It's great to have our networks back in front of all our viewers, and to bring a new service, Nicktoons, to DISH Network subscribers," said Viacom COO and president Mel Karmazin. "We apologize to our viewers for the disruption in their service, and want to thank them for their patience and support." The dispute, reminiscent of the Disney-Time Warner Cable standoff four years ago, is expected to fuel the debate over whether content owners and distributors must merge to gain negotiating leverage with one another. EchoStar has also revealed it is the subject of a probe by the Securities and Exchange Commission that may require a reinstatement of its 2001 results, though it appears the company's accounting may actually have been too conservative.
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