NEW YORK — EchoStar chief Charlie Ergen isn’t going down without a fight in his quest to thwart the negotiating power of key programmers like Viacom.
The second-largest U.S. satcaster won a legal victory in San Francisco district court late last week, obtaining a temporary restraining order against Viacom to prevent the conglom from pulling its CBS station signals in EchoStar markets covering some 1.6 million subscribers.
The two parties have been struggling to negotiate a new carriage deal for key Viacom cable networks such as Nickeolodeon, and EchoStar earlier this month filed a suit claiming the programmer was illegally threatening to pull CBS retransmission if Ergen did not meet its affiliate fee and channel placement demands.
The restraining order allows EchoStar’s Dish Network to continue broadcasting Viacom and CBS channels.
“We are pleased that the court recognizes that the interst of the public is served,” EchoStar said in a statement.
Viacom said that it was “disappointed” with the ruling but remained “highly confident” in its position. Company said it is looking forward to the full hearing it will receive at the preliminary injunction hearing, scheduled for Friday.
“We continue to believe that EchoStar’s suit is a delaying tactic and that the proper place for this dispute is at the conference table, not the courtroom,” Viacom said in a statement.
In its suit, EchoStar claimed Viacom was strong-arming the satcaster by linking local CBS station carriage to the carriage of Viacom’s cable networks.
While programmers have long used a carrot and stick approach with its must-carry stations — offering retransmission in exchange for getting cable/satellite carriage for new program services — this is the first time a distribution dispute has wound up in court. It could set a precedent for other distributors, such as Cox, which is holding out against “excessive” fee demands from the likes of Disney (ESPN).
Ergen is playing tough against Time Warner in carriage negotiations as well. EchoStar’s carriage deals for Turner Classic Movies, Cartoon Network, Boomerang and CNN all expired Dec. 31, and the companies are currently operating on a “multimonth extension” pending resolution. EchoStar claims Turner’s rate increase demands are too high.