AMC's Settlement of $2.4 Billion Suit Returns 'Walking Dead' to Dish

Deal Includes Long-Term Carriage Pact for AMC on Dish

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AMC Networks and pay-TV provider Dish Network said they reached a settlement in their lawsuit over AMC's claim that Dish wrongfully terminated their contract for high-definition TV programming.

'The Walking Dead'
'The Walking Dead' Credit: AMC

The settlement includes a return of AMC's networks and award-winning shows like "Breaking Bad" and "The Walking Dead" to Dish's viewers starting yesterday, according to AMC's statement. Dish had dropped AMC's channels in July, saying that they didn't deliver the ratings to justify their price.

"We are glad to have settled the case and reestablished our long-term relationships with AMC Networks and Cablevision," Dave Shull, Dish's senior VP of programming, said yesterday in a separate statement. "This multiyear deal delivers a fair value for both parties and includes digital expansion opportunities for AMC Networks' programming."

Cablevision Systems, AMC's former owner, sued Dish in 2008 over a now-defunct HD satellite TV service called Voom, claiming Dish breached a 15-year contract to offer the service to its 14 million TV subscribers. AMC sought $2.4 billion in damages. A jury trial was proceeding in New York State Supreme Court in Manhattan.

Dish will pay $700 million to Cablevision and AMC and enter into a long-term distribution agreement with AMC to carry AMC, IFC, Sundance Channel and We TV, according to the companies.

The settlement also includes Dish receiving a portion of satellite video airwaves from Cablevision. As part of the agreement, Dish will receive multichannel video distribution and data service, or MVDDS, spectrum in 45 markets. Stefan Anninger, an analyst with Credit Suisse AG, wrote in a note that while the spectrum transfer is interesting, "we are not sure it does much for Dish in the near term."

Cablevision claimed that it spent $103 million on Voom in 2006. Dish said that figure included corporate overhead expenses and that the contract stipulated the money must be spent on programming. The legal dispute was over the meaning of the contractual phrase "on the service" in relation to spending.

Cable provider Comcast Corp. and DirecTV are the largest U.S. pay-TV companies. Englewood, Colo.-based Dish is the third-largest U.S. pay-TV service.

Georgia Juvelis, a spokeswoman for New York-based AMC, and Kelly McAndrew, a Cablevision spokeswoman, said the companies had no additional comment beyond their statement.

The case had been marked by disputes over evidence, which led to sanctions against Dish by State Supreme Court Justice Richard Lowe .

The judge had planned to tell jurors before deliberations that Dish destroyed emails before and after the suit was filed. Lowe said he granted AMC's motion for sanctions because Dish should have anticipated a lawsuit and begun saving emails when it notified Voom it might terminate the contract. Dish said the emails were automatically deleted.

After the trial began, Dish was accused again by AMC of withholding evidence. Dish argued that the communications at issue were between an attorney and his client and should be protected from disclosure. Mr. Lowe ordered that the documents be presented to him. Dish appealed and lost.

The evidence sought by AMC for the trial might have influenced the amount of damages awarded if it won, Orin Snyder, a lawyer for AMC, had said in court while the jury wasn't present. The lawyer claimed that Dish provided HD subscriber totals that were lower than what some analysts estimated, which could reduce a potential damage award by more than $1 billion. He sought additional files that would back up Dish's numbers.

Dish accounted for 13% of AMC's subscriber base, AMC said.

Cablevision spun off AMC Networks, formerly known as Rainbow Media, as a separate publicly owned company last year.

~Bloomberg News~

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