Fox Sues EchoStar Over Fee Payments
News Corp.’s Fox Sports Net filed a lawsuit late Monday against EchoStar Communications Corp., claiming that the satellite TV distributor owed it at least $25 million in subscription fees for carrying its 12 regional channels.
The lawsuit, filed in U.S. District Court in Los Angeles, stems from a $10.3-million payment that Fox said it received from EchoStar in March 2003 labeled “shortfall payment,” according to the suit. Cable and satellite distributors such as EchoStar pay programmers monthly fees based on the number of subscribers receiving their channels.
Fox said in the suit that the $10.3 million could stem from a miscalculation by EchoStar of its subscriber base for 2002 and that the company would owe it an additional $25 million if it made the same mistake in 2000 and 2001.
The $10.3-million payment represents “a significant percentage” of EchoStar’s yearly bill from Fox, said Rita Tuzon, Fox Cable Networks’ general counsel. She said she did not know whether other programmers were affected.
Fox said EchoStar had failed to respond to several requests for an explanation or to open its books for examination, as its contract requires, according to the lawsuit.
EchoStar executives could not be reached for comment.
Despite the alleged breach, Fox executives said they would not pull the channels off of EchoStar’s Dish Network.
News Corp. owns EchoStar’s biggest rival, DirecTV.
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