Execs say Dish threats are retaliation for long-running legal dispute

AMC Networks said any monetary damages it might receive from satcaster Dish Network in an upcoming trial would be split 50-50 with its former parent company, Cablevision. A trial date will be set at a meeting on Tuesday in Gotham.

AMC execs discussed the legal situation during a conference call to discuss the cable group’s first quarter earnings, in which AMC posted a 40% jump in net profit.

AMC has asked for $2.5 billion of damages in litigation from 2008 that it claims is spurring Dish’s recent threat to drop its four cablers — AMC, IFC, We TV and Sundance Channel — as contracts expire this month and next. The conflict centers around a disputed deal for Dish to carry a suite of high-def channels called Voom.

Cablevision spun off AMC into a separate public company last summer. The Dolan family, which controls Cablevision, is AMC’s single-largest shareholder.

AMC CEO Josh Sapan on a conference call that Dish’s move “is directly and absolutely related to the litigation” and not, as Dish chairman Charlie Ergen insists, to the nets’ fees or low ratings among Dish subscribers.

Last week, Dish lost an appeal on a court ruling that it had destroyed evidence in the case. Sapan said Dish has retaliated as things have “taken a turn for the worse.” But getting bumped from Dish would entail some financial fallout for AMC, Sapan said, and the company is actively exploring other distribution options.

The conflict escalated as AMC reported a stellar quarter where profit surged by more than 40% to $43 million led by flagship AMC and its hit drama “The Walking Dead.”

Revenue jumped 20% to $326 million. Advertising revenue soared by nearly 30% with a 15% jump at AMC, which is also home to iconic “Mad Men,” “Breaking Bad” and “The Killing.” Affiliate revenue rose 8%. The sturdy numbers validate AMC’s strategy over the past five years of moving to more original programming and owning more of it.

AMC shares were up 2.8% in midday trading, outperforming the overall market.

AMC said international revenue nosed up 3.8% to $26 million and losses widened by $1 million to $13 million.

Dish has argued that AMC shows don’t click with it large rural subscriber base and are available on other platforms like Netflix and Amazon.com, diluting their value. Sapan rejects both arguments.

While AMC hasn’t got access to Dish’s own data, “We have national ratings put out by Nielsen and we see increases. We see ‘Walking Dead’ frankly blowing away other series on basic cable with broadcast-sized ratings, so we don’t have any reason to think that Dish results would be any different.”

He noted that AMC series aren’t available on streaming services until one year after they debut, which is on the conservative side of the spectrum among programmers.

He said AMC has noticed a “virtuous cycle” where a streaming offer seems to build demand for new seasons on linear TV as viewers discover series and catch up on old episodes. It’s unusual for skeins to see significant ratings boosts in their fifth, fourth, or second seasons like “Mad Men,” “Breaking Bad” and “The Walking Dead” did, he said.

AMC recently greenlit pilots for two new originals: an adaptation of dark U.K. series “Low Winter Sun” written and exec produced by “Cold Case” veteran Chris Mundy in partnership with Endemol; and a legal drama from AMC Studios written and directed by Richard LaGravenese and Tony Goldwyn.

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