Shares of Dish plunged Wednesday as several Wall Streeters warned of a big black eye if the company doesn’t settle with AMC Networks ahead of a jury trial set for September.
Dish stock plunged 3.42% to $26.80, while AMC popped 2.16% to $40.73.
The lawsuit is separate from a recent battle over Dish’s carriage of AMC networks, including AMC, IFC, Sundance Channel and WeTV. AMC insists that Dish refused to renew its contract without any negotiation of rates and pulled the channels at the end of June in order to gain leverage in the looming legal battle.
“We believe Dish is making a strategic mistake, risking billions to save $70 million per year in AMC license fees vs. settling their lawsuit and agreeing to a new long-term distribution deal,” said BTIG Research’s Richard Greenfield.
AMC, which was part of Cablevision when the Voom dispute erupted, is asking for $2.5 billion in damages.
Initial findings haven’t gone well for Dish. A judge ruled this spring that the company had destroyed evidence in the case.
“Cablevision and AMC enter the trial with a huge head start,” Moffett said. “In essence, the jury is to begin the trial with the assumption that Dish’s destroyed records that would have supported Cablevision’s claims. The odds would therefore appear to be heavily in Cablevision’s/AMC’s favor.”