Disney, EchoStar Settle ABC Family Battle
Yellow Lightning
Thu Apr 4,10:24 PM ET
LOS ANGELES (Reuters) - Walt Disney Co. and EchoStar Communications Corp. on
Thursday ended months of legal wrangling that threatened to block Disney's
new ABC Family Channel from reaching viewers of the nation's No. 2 satellite
TV system.
The long-term deal retains ABC Family, which Disney bought in 2001 for $2.9
billion, on the EchoStar system and restores Disney's all sports channel
ESPN Classic by mid-April, the companies said in a joint statement.
The exact length of the pact and financial details were undisclosed.
ABC Family has remained on EchoStar's DISH Network service pending a court
hearing on a request by Disney for an injunction. EchoStar, however, dropped
ESPN Classic because its affiliate agreement expired Jan. 1.
EchoStar currently reaches some 6 million subscribers, and is working to
merge with No. 1 satellite television provider DirecTV, a unit of Hughes
Electronics Corp. .
A combined company would have some 16 million subscribers. Losing access to
so many viewers would have been a major blow to Disney as it works to boost
ABC Family viewership.
Disney also said it has dropped an action filed in federal court in Miami
against EchoStar related to the broadcaster's carriage of local channels and
the regions in which it is allowed to show specific channels.
Last year, EchoStar said it would pull the plug on ABC Family on Jan. 1, in
part to make room for an expanded lineup of local channels it is required to
carry and in part, the company said, because ABC Family's viewership had
declined.
EchoStar claimed it had the right to drop the channel under a
change-of-control provision in the network's affiliate agreement with
EchoStar, which dates to 1995.
At that time the channel was called the Family Channel and was owned by
Christian broadcaster Pat Robertson. He sold the channel in 1997 to
children's entertainment mogul Haim Saban and Rupert Murdoch's News Corp.
Murdoch and Saban in turn sold the renamed Fox Family Channel to Disney for
$2.9 billion in cash and $2.3 billion in assumed debt last year. Disney then
renamed the channel and began programming it with reruns of popular programs
from ABC.
Disney sought an injunction to keep the channel on the satellite system, and
on Dec. 31 Judge Gary Feess of U.S. district court in Los Angeles granted a
temporary restraining order keeping the channel on-air.
In January, he postponed a hearing on the injunction to March to allow both
sides more time to research each others' positions. That rescheduled hearing
was subsequently postponed another three times as the two sides sought more
time to negotiate.
A Disney spokesman was not immediately aware if the deal represented a new
affiliate agreement or an extension on the existing agreement EchoStar had
contested, which runs through 2005.
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