Dish Network, Disney's ESPN Go to Court
Feb 11th 2013 9:20AM
A lawsuit filed in 2009 by Dish Network Corp. (NASDAQ: DISH) against sports network ESPN, which is owned by The Walt Disney Co. (NYSE: DIS), goes in front of a jury in Manhattan today. The dispute centers on Dish's claim that ESPN violated a contract clause requiring the sports network to offer Dish the same carriage rate that it offers to other carriers. But that is not the most interesting bit.
The interesting part is whether ESPN will have to reveal publicly the payment it extracts from the cable and satellite companies to carry the network's sports programming. We noted in December that sports networks account for as much as half the cost of a cable subscription.
If ESPN is forced to reveal what it charges for its programming to carriers like Dish, DirecTV (NASDAQ: DTV), Time Warner Cable Inc. (NYSE: TWC), Comcast Corp. (NASDAQ: CMCSA) and others, the information could stoke a revolution against the current packaged subscriptions the carriers offer. Because all subscribers subsidize the sports channels - whether they watch them or not - carriers have been reluctant to offer subscribers a sports-less package, fearing that it would drive up costs for those who want the sports channels to a level where those subscribers would flee because of the high prices.
Filed under: 24/7 Wall St. Wire, Cable Companies, Law, Satellite, TV Tagged: CMCSA, DIS, DISH, DTV, TWC