Viacom and Cablevision are locked in a nasty legal battle, and the latest move by Viacom appears to show the media giant digging in its heels. The Hollywood Reporter’s Hollywood, Esq., reports that the company is demanding that its contract with Cablevision be rescinded.
The move comes in response to an antitrust suit filed by cable operator Cablevision, with Viacom issuing counterclaims accusing Cablevision of committing fraud in connection with the two companies’ most recent agreement for TV carriage.
“The charge focuses on the agreement worked out between the two sides in December 2012. Viacom now says that Cablevision had a ‘secret plan’ during those negotiations, and wouldn’t reveal the secret lest ‘negotiations would have come to a screeching halt,’” THR reports. “Just two months after the contract was executed, Cablevision filed a lawsuit that alleged that Viacom engaged in a ‘per se’ illegal tying arrangement by bundling ‘must-have networks’ with lesser-viewed ones such as Palladia, MTV Hits and VH1 Classic.”
The report adds: “According to the complaint, Viacom threatened a ’10-figure penalty’ if the bigger networks were licensed but not the smaller ones. (Viacom sees it differently: Cablevision got a discount on the bigger networks by taking the smaller ones.) The harm alleged was that Cablevision couldn’t use its resources on other independently operated networks.”
The latest move by Viacom seeks to deny Cablevision its rights to top Viacom cable channels MTV, Nickelodeon and Comedy Central, the report notes.
“Viacom initially reacted to the lawsuit by challenging whether the bundling of channels was really a ‘per se’ tying arrangement and arguing that the plaintiff had failed to demonstrate marketplace foreclosure,” THR notes. “Despite the arguments, U.S. District Court Judge Laura Taylor Swain rejected Viacom’s motion to dismiss in June because Cablevision had ‘pleaded facts sufficient to support plausibly an inference of anticompetitive effects.’”
Cablevision sued in part to try to force Viacom to accept “a short-term license that allowed the cable company to have core networks like MTV, Comedy Central and Nickelodeon, but without the non-core networks. Viacom told the judge not to invalidate its carriage agreement, arguing that Cablevision wanted ‘to reform the contract to its liking so as to keep only the rates and terms it would like to have,’” the story reports.
The report adds: “The judge declined to take an immediate step to void the licensing deal. But now, it’s Viacom’s turn to argue for the contract’s rescission.”