10:28am PT by Eriq Gardner
Telus Claims AMC Used 'Walking Dead' Premiere in Cable Fee Fight
Telus Communications is not very happy that AMC might deprive hundreds of thousands of its Canadian subscribers of seeing the end of the fourth season of The Walking Dead.
The telecom filed a lawsuit late last week that alleges that AMC has not provided proper notice to cancel its existing contract. The complaint says the two companies have discussed terms for a new agreement, but that negotiations broke down after Telus refused to bow to "increasingly harsh terms" proposed by AMC.
The plaintiff proposes the theory that because Breaking Bad had concluded its run and Mad Men will soon finish as well, AMC has been rushing to gain higher fees from its distribution partners, and along the way, has become embroiled in fights with companies like AT&T and Dish. The lawsuit says, "Seeking to capitalize on what it realizes may be fleeting success, AMC has publicly expressed dissatisfaction with carriage rates AMC receives from its licenses with television distributors, claiming that those rates do not reflect the popularity of the programming."
Telus says it honored its contractual obligations with AMC and that a termination letter sent on Sept. 27 isn't justified. The plaintiff says it was "shocked" to see the termination and that it wasn't given 30 days to cure defaults. "These alleged defaults are a transparent attempt to terminate the Agreement and extract from Telus the high carriage rates AMC could not achieve at the negotiating table."
Now, the telecom company asserts that AMC has been using the highly successful The Walking Dead to tarnish its reputation by telling viewers they will essentially be left out in the cold.
"When Telus did not immediately capitulate to AMC's strong-arm tactics, AMC went a step further, threatening to unilaterally communicate to Telus' subscribers that the service would soon be terminated," says the lawsuit. "If Telus does not agree to new contract terms by today, Friday, Oct. 11, 2013, AMC claims that beginning this Sunday, Oct. 13, 2013 during the season premiere of its most popular show, 'The Walking Dead,' AMC will broadcast a scrolling message, or 'crawl,' at the bottom of the television content feed seen by Telus' subscribers, announcing an imminent service cancellation. This is not an empty threat: AMC has deployed similar damaging public relations efforts in past disputes with other distributors."
Telus, represented by Michael Elkin at Winston & Strawn, seeks an injunction and damages for breach of contract and the implied covenant of good faith and fair dealing.
AMC declined comment on pending litigation. The basis for AMC's termination is unclear thanks to redactions in Telus' complaint.