AMC, AT&T in new carriage deal

Pact announced after channels dumped by Dish

AMC Networks Sunday inked a new carriage deal with AT&T, salvaging something from a stressful weekend that saw satcaster Dish drop the channels from its lineup at midnight Saturday.

“We have reached a long-term agreement with AT&T that appropriately recognizes the value of our networks and our award-winning and high-quality programming,” AMC said in a statement. “We respect AT&T as a partner that has a genuine interest in working with us to ensure their customers continue to enjoy our programming.” AT&T’s U-Verse service has about 4 million subscribers.

In a statement late Saturday, AMC, which also owns IFC, WeTV and the Sundance Channel, said Dish “never engaged with us in any rate discussions. Dish customers have lost some of their favorite shows because of an unrelated lawsuit which has nothing at all to do with our programming, our ratings or our rates.”

Dish announced over a month ago that it planned to drop AMC’s networks from its system of 14 million subs when their contract expired June 30. Late last week, it unveiled new networks that would take the slots. The public feud has pummeled AMC shares and is being closely tracked as a bellwether for upcoming carriage discussions across the industry.

Wall Streeters said that regardless of motive, rates or litigation, it will send a message if Dish doesn’t lose subscribers as a result of dropping AMC.

“From the point of view of the entire industry, it’s almost unprecedented to give viewers this kind of notice. Not threatening (but) saying, ‘We are going to drop it,”‘ said one analyst. “It shows the vulnerability of smaller players. If you are not dealing in a bundle, not as powerful as big cap peers, it will be increasingly hard to maintain leverage.”

AMC and Dish are involved in a breach-of-contract lawsuit heading for trial in a New York court Sept. 18. AMC is asking for $2.5 billion in damages and claims Dish is dropping its channels to gain leverage in the litigation. Wall Streeters think AMC has a good shot of winning the lawsuit.

Dish’s statements don’t refer to the lawsuit. It maintains the channels are too costly given their ratings. “AMC Networks requires us to carry low-rated channels like IFC and WE to access a few popular AMC shows. The math is simple. It’s not a good value for our customers,” said Dish senior VP of programming David Shull.

AMC has become a force in edgy original programming. It’s home to “Mad Men” and “The Walking Dead.” The new season of “Breaking Bad” premieres July 15.

Dish is replacing AMC channels with what it called “stronger movie and entertainment content.” It already dropped Sundance earlier this month. Mark Cuban’s HDNet Movies is taking AMC’s slot. Style and HDNet replace WE and IFC. Plans are for HDNet to become a new entertainment and music channel called AXS.TV.

In a statement Friday, Dish senior VP of programming David Shull called HDNet Movies and HDNet “exciting offerings for our customers. We will continue to fight hard for choice, control and value in home entertainment. “A significant portion of any pay TV bill goes to fees for content providers like AMC Networks,” Shull said.