3:43pm PT by Eriq Gardner
CNN, Dish Fight This Question in Court: Is The Weather Channel a News Network?
A mystery court case between CNN's parent company and Dish Network gained some clarity on Friday upon the unsealing of court documents. According to a summary judgment motion, CNN contends that Dish owes at least $31.6 million in license fees after reversing its long-standing position that The Weather Channel is a 24-hour news service.
How does weather factor in the case?
Well, according to a filing by the plaintiff — made public after a New York federal judge wouldn't let the parties cover up key license terms — the contract called for Dish to pay fees based on the satcaster's total subscribers rather than the number of Dish customers who received CNN if any 24-hour per day national news service was more received on Dish's system. This appears to have been a mechanism to ensure CNN's reach, as more people watching CNN means more money charged to advertisers.
For more than seven years, Dish interpreted The Weather Channel to be a news network reaching more subscribers than CNN and, accordingly, used the bigger number.
But in 2015, a Dish financial analyst is said to have offered options to manage its financial responsibility. The analyst explained one way to reduce payments would be “to make sure CNN is the most widely distributed 24 hour news channel." The analyst added, “Arguably, there are three news channels more widely distributed: CSPAN, Weather Channel, and Newsmax.”
HIs analysis concluded that making CNN the most widely distributed news channel would save Dish $9.8 million a year.
Two years went by, and during this time Dish is said to have analyzed ways to reduce the number of subscribers who received The Weather Channel by removing it from certain packages.
"Ultimately, DISH decided not to make any changes to the packages that included The Weather Channel or CNN," states the summary judgment motion. "Instead, DISH changed its position concerning The Weather Channel that DISH had consistently taken since the beginning of the 2009 Agreement."
In spring 2017, Dish conveyed the position that it had been overpaying for CNN all along. According to the plaintiff, Dish had suddenly changed the classification of The Weather Channel as a 24 hour news service. Dish first withheld more than $20 million, then allegedly started underpaying.
Turner, CNN's parent company, thinks this makes no sense.
Not only does Turner argue that Dish is "bound by its own years-long admission" about The Weather Channel being news, the summary judgment motion posits the same holds true under the plain language of the agreement.
"The dictionary defines a 'news service' as 'an organization that gathers and publishes or broadcasts news,'" states the brief. "News, in turn, is defined as 'information about a recently changed situation or a recent event.' Coverage of weather is clearly news and it is undisputed that numerous news organizations cover weather and weather-related news."
As for Dish's position, the company's own summary judgment papers agree that the classification of The Weather Channel is the crux issue. On the other hand, Dish tells the judge that Turner knew all along that it had been overpaying for CNN and that the language about a 24 hour news service — and who qualified — wasn't discussed in negotiations.
Dish shifts the emphasis slightly.
"The ordinary meaning of the words does not support [Turner's] position that The Weather Channel is an 'other 24-hour per day national news service,'" states the opposition brief. "The meaning of the term 'other' is: 'in addition to the person or thing just mentioned.' ... In the context of the CNN rates provision, 'other' means another 24-hour per day news service like CNN. Any reasonable assessment of what services could constitute an 'other 24-hour per day national news service' must compare the content included in those services to the content of CNN."
Adds Dish, "The question is not whether a weather report can be news. The issue is whether a particular channel offers a mix of news programming comparable to CNN. ... The Weather Channel offers virtually none of the other categories CNN is contractually obligated to provide — it is not a comparable service and therefore not an 'other 24-hour per day national news service.'"
The satcaster has also brought counterclaims that Turner breached a most favored nations clause by giving a lower rate to a different distributor and then failing to provide notification to Dish.
Turner says it did provide Dish the option to substitute the more favorable provision.
The dispute between the two companies also encompasses other claims including whether Dish was provided contractually guaranteed promotional time to hype its service, the proper way to calculate bulk billing (such as when a hotel purchases services for multiple rooms), payments for sports packages and license fees for passengers who fly on Delta Airlines.