4:08pm PT by Eriq Gardner
DirecTV's Super-Secret Lawsuit Against Al Jazeera Revealed (Exclusive)
Archivist and activist Carl Malamud once likened state and federal cases as the source code to America's operating system. Unfortunately, many legal documents remain hidden from public inspection. One example comes from a lawsuit filed this past July by DirecTV against Al Jazeera America. The complaint was submitted with heavy redaction. If there was an award given to the year's most extreme blacking out of so-called "secrets," the parties involved in this dispute would surely deserve to beat any spy agency for this one.
Earlier this week, Los Angeles Superior Court Judge Elizabeth Allen White stood up to the parties. Remarkably, she did so without any prompting from any media organization. "There is a huge, huge right for the public to be aware of what's going on in the litigation," she told lawyers at a court hearing.
DirecTV has now filed a partial withdrawal of its motion to seal, and as a result, its beef with Al Jazeera America has been revealed for the first time. The less-redacted version indicates that the satellite company isn't happy with the programming served up by Al Jazeera America and has a right to take the news channel off of its service.
In late 2012, Al Jazeera began negotiating to buy Current TV for $500 million. The Qatari-backed network was interested in acquiring Current TV's favorable distribution rights, but some distributors blanched. When Al Jazeera's acquisition was completed in January 2013, Time Warner Cable took advantage of a termination clause and removed Current TV from its service. Later, TWC came to an agreement to carry Al Jazeera America, but that came at a high price for the Qataris.
Although Current TV was earning good money for every cable and satellite subscriber, Gore's old news network also had "most favored nation" obligations to its distributors. Thus, by allowing TWC to get a better deal, Al Jazeera had to offer the same favorable terms to its other distributors like AT&T and DirecTV. Gore's lawsuit called the Al Jazeera-TWC deal "ill-advised, one-sided and unprofitable," and Gore's complaint added that it "effectively denuded the extensive revenue-generating distribution agreements that Plaintiffs had built for Current TV."
Gore's lawsuit also says that Al Jazeera is "encouraging distributors to file baseless claims" so as to access $65 million in escrow that was held back from the $500 million purchase of Current TV. In doing this, the money in escrow has become a slush fund to "buy favor with its distributors," Gore alleges.
That might be the case — or it might be perfectly fine, as Al Jazeera argues —but according to DirecTV's now-revealed lawsuit against Al Jazeera, the news company owes money thanks to the MFN obligations and "has refused to allow PwC to audit the necessary documents to determine whether AJA has complied with its MFN obligations."
If this is a conspiracy, as Gore seems to think, Al Jazeera and DirecTV are putting up a brave front.
In answering DirecTV's lawsuit, Al Jazeera has vaguely suggested in this case that it is entitled to offset any contractual damages because the satcaster has engaged in "unlawful conduct" and has itself breached the parties' contract.
But possibly even more undercutting of Gore's insinuation that Al Jazeera and DirecTV are in cahoots to steal Gore's money is the allegations tied to whether DirecTV has any obligation whatsoever to carry Al Jazeera America.
DirecTV says its old agreement with Current TV set forth the type of programming the parties intended — shows like "Google Current," "News Current," "Trivia" and "Current Hottie."
"In the months that have followed the name change and content change, the programming on Al Jazeera America has remained a steady line-up of traditional-style news programs, with an average weekday including a dozen hours of 'News', along with the same news programs AJA had in its sample grid from last August," states the complaint.
DirecTV says that Al Jazeera is in breach of the section of the agreement that "defines what the Service shall consist of," and since the quality and quantity of the programming has "materially changed," the plaintiff is seeking relief. Full complaint below (minus residue redactions).