George Mannes

Return to Article

Viacom, EchoStar Reportedly Nearing Deal

George Mannes

Viacom (VIA.B Quote) and EchoStar Communications (DISH Quote) are close to settling their differences, EchoStar Chairman Charlie Ergen said Tuesday evening.

"We're pretty close in terms of agreement in principle, but there are some details that have to be worked out," Dow Jones reported Ergen as saying.

EchoStar, the operator of the Dish Network direct broadcast satellite service, has been embroiled in publicly acrimonious negotiations with Viacom over the terms under which Dish transmits the signals of Viacom's 16 owned-and-operated local TV stations, as well as Viacom's stable of nonbroadcast programming channels.

On Tuesday morning, EchoStar pulled Viacom's programming from the Dish Network, leaving Dish's 9 million-plus subscribers without access to such channels as MTV, Nickelodeon, Comedy Central and BET, as well as pulling CBS stations from the Dish-delivered local programming package in cities including New York, Los Angeles, Chicago and Philadelphia.

The dispute between the two companies is the latest in a series of recent battles between content providers and multichannel video distributors over the appropriate costs and terms of programming. Over the past few months, for example, Cox Communications (COX Quote) complained about the cost of sports programming, but subsequently reupped with the objects of its corporate ire, Fox (FOX Quote) Sports Net and Disney's (DIS Quote) ESPN.

Speaking in Tuesday's edition of "Charlie Chat," a customer call-in TV show that Dish Network regularly broadcasts to its subscribers, Ergen reported that on Tuesday people at both Viacom and EchoStar said they wanted to make a deal. "Usually, when those things happen, good things happen," Ergen said.

Acknowledging subscribers' unhappiness at losing access to Viacom's programming, Ergen said he hoped the channels would return soon. "Hopefully, you'll forgive us," he said.

When one questioner asked whether customers who dropped their Dish service because of the absence of Viacom programming would have to pay contract cancellation penalties, Ergen suggested it could be decided on a case-by-case basis. "If this drags on long enough, we'd have to take a look at that," he said.

On Tuesday, Viacom's shares fell 35 cents to close at $38.90. EchoStar stock rose a dime to $34.28.