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Dish faces setback in Voom trial

Judge rules emails can be intro'd as evidence

Dish Network is getting creamed in its court battle with Cablevision, emails presented Monday weakened the satcaster’s case in the breach of contract trial. That setback came the day that AMC logged record basic cable numbers for the preem of “The Walking Dead,” even though the channel, formerly owned by Cablevision, has been dark on Dish Network for nearly four months.

Dish’s colorful Chairman Charlie Ergen, who said this summer that Dish subscribers “live on farms and ranches and have no idea of watching zombies,” is likely to testify Tuesday afternoon.

Dish pulled AMC from its satellite system in June when their carriage deal expired and industryites have figured a new agreement is linked to the trial. AMC is a former subsid of Cablevision, which sued Dish for dropping an HD service called Voom two years into a 15-year pact.

Dish claimed it had the right because Voom didn’t spend a promised $100 million on programming in 2006. But an email exchange between Ergen and Dish exec Michael Schwimmer in April 2007 indicated that contractually some of the cash could be also spent on overhead, as Voom insisted.

Dish had appealed to keep those emails out of court but lost and was soundly berated by the Judge Richard Lowe of New York State Supreme Court last week for holding up the trial.

“The evidence is mounting against Dish and it continues to be on the wrong side of each significant trial ruling,” wrote Thomas Clapps of Susquehanna Financial Group. Dish has started to present its case after Voom lawyers rested on Friday. But given the headwinds so far a settlement seems ever more likely, either before the trial ends late this month or after the jury verdict. Dish is keeping the pressure high with “Not available on Dish” plastered on “Walking Dead” trailers online and on air.

Cablevision has asked for $2.4 billion in damages which it would split with AMC Networks, parent of AMC, IFC, WeTV and Sundance Channel. AMC used to run Voom. Dish could probably lower the cash payout if it offers a new carriage deal for AMC.

“It appears that Dish is playing this out for the maximum leverage against AMC as the longer the trial and potential appeal lasts the longer AMC loses revenue by not being carried on Dish,” Clapps said.

Neither the courtroom nor the zombie drama fazed Dish shares, which surged 3.41% Monday. The market’s hoping the company may soon get FCC authorization and strike a series of deals to use extra spectrum it owns to launch a wireless service.

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