EchoStar gavels off Court TV

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EchoStar Communications Corp. yanked Time Warner-owned Court TV from its Dish Network channel lineup effective Monday as a result of stalled carriage negotiations.

But sources indicated that this isn't the typical squabble between programmer and distributor over rate increases; EchoStar is intent on getting a rate decrease by downgrading Court TV to a channel tier available in 3 million homes less than the 13 million to whom the channel was previously offered.

That would impact the amount of revenue Court TV generates, which is based on audience guarantees to advertisers.

Andrew Heller, president of domestic distribution at Turner Broadcasting, which oversees Court TV, expressed regret that an agreement could not be reached. "I've been doing this a long time," he said. "For the first time in my career a channel has gone dark on a major distributor. This is very disheartening."

"We are working hard to negotiate a fair contract with Turner Networks and CourtTV," EchoStar senior vp programming Eric Sahl said in a statement released Monday. "But we must also protect our customers from unreasonable demands. It is not fair to ask our customers to pay a DBS premium for a channel owned by the second-largest cable operator, Time Warner."

Turner issued a statement, saying, "They were unwilling to pay the standard industry rate for a popular network that is currently ranked in the Top 20. We are disappointed with their decision, and hope that we can reach resolution, but in the meantime, our cable operator partners and DirecTV are able to provide this network to Court TV fans."

Sources indicated that months of talks were aborted just two hours before the channel was pulled, at midnight Eastern time. Court TV's carriage deal with Dish expired Dec. 31.

EchoStar's statement expressed that it had offered Turner an extension in which to work out the deal but was rebuffed. Sources indicate Turner was not happy with the terms of the extension, which were offered in two ways: a one-week extension for which EchoStar would not be charged, or a drop to Dish Network's lower tier, known as America's Top 120, at a rate to be determined by EchoStar.

Court TV was on Dish's America's Top 60 tier. How to pay for a drop to Top 120 is the crux of the disagreement; while EchoStar is seeking to pay less to reach fewer subscribers, Turner could see the rate it had locked in for the maximum amount of subscribers as a volume discount.

The Turner-EchoStar standoff is almost a virtual replay of the situation Lifetime Entertainment Services found itself in on New Year's Day 2006, when EchoStar yanked carriage of both Lifetime and Lifetime Movie Network the day after their deals expired. However, that disagreement was over determining a rate increase. The channels were not reinstated until a settlement was reached a month later.

Over the years, EchoStar chairman and CEO Charles Ergen has demonstrated a willingness to pull programmers from his service, second in reach only to Comcast Corp. and DirecTV among multichannel distributors. In 2005, EchoStar tossed Comcast's outdoor-oriented OLN, now known as Vs. The year before, Viacom's entire channel lineup went by the wayside on Dish.

In Turner, EchoStar faces a programming powerhouse with top-rated networks that could become leverage in future negotiations, including TNT, TBS and CNN. Turner assumed full control of Court TV in May when Liberty Media sold its half of the channel to Time Warner for $735 million.

EchoStar has since replaced Court TV with Biography Channel. In December, the company said it would have to raise its subscription rates by about 3%.
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