Court Rules Against DirecTV, Forcing the Satellite Provider to Keep Two Channels in Its Lineup

Jun 16, 2014  •  Post A Comment

After a court ruling late last week, DirecTV will be required to keep two TV networks on its platform. The Hollywood Reporter's THR, Esq., reports that Thursday's decision by a Minnesota federal court virtually guarantees placement in the DirecTV lineup for Ovation TV and Reelz.

"The genesis of the dispute — which has been under wraps until late last week — dates back to the late 20th century during the race to launch satellites into space," THR reports. "At the time, it wasn't so apparent that DirecTV would become the leading satellite TV service, so successful that AT&T now wants to acquire it for $48 billion. Besides competing with the predecessor to Dish Network, DirecTV was also battling United States Satellite Broadcasting ('USSB'), owned by Stanley Hubbard, who had exclusive carriage deals with HBO and Showtime.

"DirecTV took care of this in 1999 by merging with USSB in a somewhat unique marriage. Besides $1.3 billion, Hubbard also got a long-term programming agreement to ensure that his family would in the business for 'generations.' The parties agreed that Hubbard would have a distribution right on up to three networks, but the exact deal was somewhat ambiguous."

Hubbard and DirecTV apparently differed in their opinions on the duration of the agreements, and ultimately failed to specify an exact time frame, the report notes.

The three channels included CNN competitor the All News Channel, which did not survive.

"For #2 and #3, Hubbard launched ReelzChannel, whose slogan is 'Hollywood happens here,' and Ovation TV, which is heavy on arts programming like the competition series The Fashion Fund," THR notes.

The report adds: "In 2013, seven years after Reelz and Ovation launched, the networks were up for a contract renewal. Hubbard's company says it made numerous proposals to DirecTV, which allegedly wasn't interested in renewing the contract. Instead, it claimed that the old programming agreement with Hubbard was 'no longer valid.' On the verge of having its networks dropped last September, Hubbard filed a lawsuit."

Responding to last week's ruling against it in the case, DirecTV told THR: "We are disappointed and disagree with the Court's decision, but we will continue to negotiate in good faith, as we always have, for carriage of the two channels at issue. We are also assessing our appellate options to address the ruling's errors."

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