DirecTV Inc. is suing Lifetime Television, charging that the programmer violated their carriage deal and reneged on its offer to pay Dish Network customers $200 to switch to DirecTV during the period when EchoStar Communications Corp. dropped the women’s network in a much-publicized dispute.
DirecTV, the largest satellite provider, filed suit late Wednesday charging Lifetime Entertainment Services with breach of contract, asking for the right to terminate its carriage deal with the programmer. The action, which also seeks compensatory damages, was filed in U.S. District Court in Los Angeles.
“They used us when it was it was beneficial to them, and they screwed us when they no longer needed us,” said Dan Fawcett, DirecTV’s executive vice president of programming acquisition. “We’re sort of disappointed at Lifetime’s failure to live up to commitments under two contracts with us.”
Lifetime declined to comment Thursday.
In its papers, DirecTV alleged that Lifetime violated a so-called most-favored-nation clause in their affiliation agreement, dated Jan. 8, 2005, when it settled its dispute with Dish earlier this year. DirecTV claimed that Dish is paying a lower “net effective rate,” or price, to carry Lifetime than it is under the new pact Dish and the programmer forged earlier this year.
The lawsuit also charged that Lifetime pulled back and rescinded an offer it had e-mailed to 30,000 Dish subscribers, offering to send them $200 checks if they switched from Dish to DirecTV’s service. To receive the offer, according to the suit, Dish customers would have to order and activate their DirecTV service by March 31.
Dish dropped Lifetime and Lifetime Movie Network Jan. 1 when both sides couldn’t come to terms on a contract renewal. Both networks were off Dish for about one month before reaching a new deal Jan. 31 and getting put back on.
When Lifetime and Dish reached their new agreement, Lifetime assured DirecTV that it would still honor its $200 offer to Dish subscribers who switched, according to the suit. Instead, on Feb. 3, Lifetime sent a retraction e-mail to each person who had received the offer, the suit said, saying that they would have had to switch by Feb. 3, not March 31.
As for the most-favored-nation clause, Lifetime and its corporate cousin, Hearst-Argyle Television, usually negotiate with distributors together by doing deals that include carriage of the cable network and retransmission consent for the broadcaster’s TV stations.
But in the Dish-Lifetime battle, Hearst-Argyle initially cut its own separate deal with the satellite provider, which would have paid $11 million for retransmission consent for the stations alone.
As part of Lifetime’s ultimate contract renewal with Dish, Dish is to pay Lifetime for its cable networks and for carriage of the Hearst-Argyle stations. Then Lifetime, in turn, is to reimburse Hearst-Argyle the $11 million.
According to the suit, Lifetime’s reimbursement to Hearst-Argyle on Dish’s behalf “results in a lower ‘net effective rate’” than DirecTV is paying under its contract.
