Time Warner Inc. (TWX), via its HBO cable network has sued EchoStar Communications Corp. (DISH) for $90 million saying that it has miscalculated the payment on its licensing fees.
The suit alleges that Echostar not only has failed to pay the fees that it owes to HBO, but has also not paid the interest that has built up from the late fees as well.
In an email statement, Echostar said, "They have repeatedly demanded for DISH Network to pay a satellite premium to carry their channels that is inconsistent with what cable companies are required to pay for the same services."
This is the second time in the last few days that I've heard this type of argument. Mediacom Chairman and CEO Rocco B. Commisso, mentions concerning their ongoing battle with Sinclair that it was "price discrimination" to charge them what they decided they wanted for their service. He was referring to not agreeing to Sinclair's terms and as a result having some programming pulled after the contract had ended.
With Echostar, I have to ask the same question: Who says that HBO must charge you the same price that it's charging cable companies? How come Wal-Mart (WMT) gets better prices for the same merchandise that K-Mart (SHLD) or other competitors get? What makes you any different in a competitive free market economy?
To simply refuse to pay for something they decide after the fact isn't to their liking, is at minimum unethical. They shouldn't have agreed to the terms in the first place if you didn't like them. I'm not sure what legal leg they think they are standing on. The argument seems to be that they found out after they made the deal that someone else had negotiated a better deal. So now they figure they don't have to pay the difference between the different contracts.
I don't see how Echostar would want to put themselves into this type of unethical situation because they don't like what they're paying versus their competitors. That's why you negotiate deals and keep doing it until you get what is acceptable to both sides. It has nothing to do with what type of deal a competitor has negotiated that determines whether you have to pay or not. This is stupid on Echostars' part;iIt shows a lack of integrity.
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