Media giant Viacom Inc. and EchoStar Communications Corp., which operates the satellite Dish Network, have settled their dispute and returned CBS and MTV to viewers in Chicago and other major cities.
EchoStar was criticized when it blacked out Viacom’s programming Tuesday. But Chief Executive Charlie Ergen said Thursday that Viacom early in the talks threatened to withhold the Super Bowl.
“We got off on the wrong foot,” Ergen said in a conference call with analysts and media. “There were some strong-arm tactics that were used.”
After negotiations broke down, EchoStar dropped Viacom’s programming, including MTV, Nickelodeon and all of Viacom’s CBS stations. But shortly after 2 a.m. Thursday, Chicago’s WBBM-Ch.2 and other CBS outlets around the country were again on the Dish Network, as were Viacom’s other channels.
“I don’t think we got a deal as good as we wanted,” Ergen said. “But I think it was good enough.”
Viacom did not return calls for comment.
Viacom wanted EchoStar to take the Nicktoons cartoon channel. EchoStar already offers children’s programming and did not want Nicktoons.
Ultimately, EchoStar accepted Nicktoons but also held Viacom’s price increase for its programming to 6-cents-a-month per subscriber, which Ergen described as fair and reasonable.
“Neither side could afford to have this dispute drag on much longer,” said Standard & Poor’s equity analyst Tuna Amobi. “Going forward, both sides are looking to avoid this kind of confrontation.”
Viacom and EchoStar each may have come out a winner, one analyst said.
“I think both parties got what they wanted,” said Todd Mitchell, an analyst with Blaylock and Partners LLP.
Mitchell said Viacom’s main goal was to expand outlets for Nicktoons and other new channel offerings. With relatively inexpensive programming, EchoStar can retain its status as a low-cost provider of satellite service.
Meanwhile, EchoStar said it may have to restate its results for 2001 because of the way the company had accounted for some expenses. But the company indicated the restatement would be relatively minor and would reduce expenses.
