EchoStar Communications' Dish network must honor a contractual obligation to carry a new music video network from Vivendi Universal and Universal Music Group, a U.S. District Court in Manhattan has ru
NEW YORK -- EchoStar Communications' Dish network must honor a contractual obligation to carry a new music video network from Vivendi Universal and Universal Music Group, a U.S. District Court in Manhattan has ruled. The court on April 14 issued a mandatory preliminary injunction, ordering Echostar to carry the channel as soon as possible. Litigation is still pending.
The ruling paves the way for UMG to be the first music company to launch its own music video channel. The channel, IMF: The International Music Feed, will be carried on the Dish Network right away, Universal says.
EchoStar is the second largest U.S. satellite TV service, with more than 10 million subscribers.
"We are clearly pleased with the court's ruling," says Andy Schuon, president of IMF, in a statement. "Our channel was founded on the belief that great music comes from all over the world. We are excited to bring a fresh global music perspective to U.S. television viewers."
Says EchoStar in a statement: "While we are disappointed with the judge's ruling, we intend to comply fully with the order to carry the Vivendi Music Channel. This was a preliminary hearing with no oral testimony and minimal evidence. We will continue to defend the case vigorously, and we look forward to a full trial on the merits."
Vivendi Universal filed a lawsuit against EchoStar in January to compel the satellite company to honor a 2001 investment agreement between the two companies. That pact gave Vivendi the option of launching up to five channels on the Dish network within three years after close of the deal.
The contract provided that EchoStar would pay Vivendi about 10 cents per month per subscriber for each channel, the complaint states.
Vivendi acquired more than 57 million shares of stock in Englewood, Colo.-based EchoStar for about $1.5 billion in 2001 and then sold its shares back to EchoStar in December 2002 for a loss of approximately $500 million, the suit says. However Vivendi claims that EchoStar remained under obligation to carry any channels launched before Jan. 22, 2005.
Vivendi notified the company last fall of its intent to launch three music channels. In response, EchoStar claimed it did not have any obligation to include the channels, the suit says.