ABC Cable blasts EchoStar over carriage

NEW YORK — ABC Cable Networks Group prexy Anne Sweeney has returned fire at EchoStar topper Charlie Ergen, denying Ergen’s accusations that ABC was attempting to raise fees for its ABC Family channel “beyond those agreed to by EchoStar in the contract signed in 1995.”

Sweeney’s comments, issued in a terse conference call with reporters Wednesday, are the latest volley in a heated verbal battle between satcaster EchoStar and ABC parent Disney, precipitated by a dispute over whether EchoStar is allowed to drop ABC Family from its programming lineup.

Last week, Ergen issued a release accusing Disney of demanding higher rates for ABC Family as “hush money” to keep Disney from opposing EchoStar’s $30 billion merger with rival Hughes Electronics, which is under close government scrutiny.

While Sweeney declined to comment on whether Disney’s formidable Washington lobbying team would take any position on the pact, she argued fervently that Disney has always worked with EchoStar in good faith.

“The irony in EchoStar’s comments is that the company has benefited significantly from its relationship with Disney, which began in the mid-’90s when Disney was one of the few programmers willing to support the then-fledgling satellite system,” Sweeney said.

EchoStar argues that it is allowed to drop out of its carriage contract with ABC Family in the event of a change in ownership of the network. Disney bought the channel, then called Fox Family, from News Corp. and Saban Entertainment last October.

But Disney disputed the satcaster’s decision, and the two landed in court late last year. The Mouse House won the first round of the battle, when a federal judge in Los Angeles issued a temporary restraining order barring EchoStar from pulling ABC Family off the air.

A hearing is scheduled for Jan. 17 to determine whether the court should issue a longer-term injunction for the duration of a full trial, which is expected to last for at least several months.

ESPN Classic gone

EchoStar already removed another Disney network, ESPN Classic, as of Jan. 1 after its contract expired, and the two companies couldn’t agree to terms for a new one.

Disney stock sank by more than 4% in Wednesday’s trading, while shares of EchoStar slipped by just over 1%.

Meanwhile, Ergen said at the Consumer Electronics Show in Las Vegas on Wednesday that EchoStar will raise its rates by $1 monthly, or about 3% on average, in March. Exec added that the company might have had to double the rate hike, had it not trimmed expenses by dropping ESPN Classic.

Ergen added that EchoStar had reached a deal with News Corp. to carry the Fox Sports channels, whose continued carriage was also in question.

(Reuters contributed to this report.)

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