Lifetime, Dish settle spat, agree to multiyear deal

Satellite-TV firm had balked at rising cost of distribution pact

Joyzelle Davis, Rocky Mountain News

Published February 2, 2006 at midnight

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It could be the ending to one of Lifetime's trademark tear-jerker movies: After an often acrimonious monthlong dispute, the female-oriented network and EchoStar Communications' Dish Network have kissed and made up.

Douglas County-based Dish yanked Lifetime and Lifetime Movie Network from its satellite-television service on New Year's Eve, claiming Lifetime was demanding exorbitant increases to renew distribution agreements for both channels. Lifetime responded with a "Dump Dish" campaign that involved rallies and full-page newspaper ads that claimed "Dish doesn't value women."

After the very public spat, both sides were uncharacteristically reserved once they reached a deal. They issued a joint press release that didn't disclose terms of the "multiyear" deal, which returns Lifetime to Dish's entry-level "America's Top 60 Network" and bumps Lifetime Movie Network from the 120-channel tier to the premium "America's Top 180."

"We are pleased to restore Lifetime and Lifetime Movie Network to our viewers, and look forward to a long relationship with Lifetime for carriage of their quality programming to our customers," said Eric Sahl, Dish's senior vice president of programming. "We thank our customers for their patience throughout this negotiation process."

Despite the posturing, there was an economic imperative for both sides to reach a deal, analysts said.

The loss of Dish would cost Lifetime 12 million customers from its 89.5 million customer base, resulting in the loss of millions in advertising revenues and license fees. For Dish, which is adding a gross of about 900,000 new subscribers each quarter, the lack of a Top 5-rated basic cable channel would give customers in the competitive pay-TV market a reason to sign up with a rival.

The lack of Lifetime "may not have caused current subscribers to dump Dish, but it would've set up a reason for potential customers to not subscribe," said Bruce Leichtman, president of Leichtman Research Group. "If just 10 percent of those customers go elsewhere, over time it'll start hurting EchoStar."

This isn't the first time Dish has gone to the mat with a network over a fee increase. It yanked Viacom's channels for a couple of days two years ago and has kept sports channel OLN off its service since October.

Dish, which prides itself on being the lowest-priced all-digital provider, claimed Lifetime wanted a 76 percent increase over a three-year term.

Lifetime, which is jointly owned by Hearst Corp. and Walt Disney Co., denied that was the amount and said it was seeking a few cents per subscriber each month.

EchoStar

DISH: Nasdaq

$27.72

+ 12 cents

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