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Tensions Mount as EchoStar Accuses Disney of Demanding “Hush Money”

News, 03 January 2002


The spat between Walt Disney Company and satellite operator EchoStar Communications heightened Wednesday, as the latter accused the media titan of demanding “hush money” for political support.

The duo are already embroiled in a lawsuit launched by Disney in response to plans to remove its ABC Family and ESPN Classic channels from EchoStar’s DISH Network, America’s second largest satellite service with 6.4 million subscribers [WAMN: 02-Jan-02].

EchoStar blasted Disney for charging cable and satellite firms high fees for ratings winners such as ESPN, arguing that it forces such distributors to drop less popular channels to cover the payments.

In a statement, the satellite firm argued it “simply cannot carry every service a programming behemoth like Disney wishes to force upon EchoStar at costs which bear little relationship to the value they provide to consumers.”

It accused Disney of demanding higher fees in return for support for EchoStar’s bid to merge with Hughes Electronics, owner of number one satellite broadcaster DirecTV – a deal the media group has opposed. “In the end,” continued the statement, “EchoStar refuses to pay hush money to Disney, and believes that interested government officials and the public will see through Disney’s self-serving tactics.”

Well-known for its aggressive approach to bargaining with distributors, Disney responded by claiming EchoStar’s statement highlighted the dangers of merging America’s two satellite broadcasters, emphasising “fears that Disney shares with regulators and public interest groups regarding EchoStar’s penchant for wielding monopoly power in unfair ways.”

News source: New York Times