Cablevision claims Viacom tried to extract a $1 billion “penalty” for not carrying all 22 of its cable networks in their bitter battle over channel bundling.
The Bethpage, LI-based cable operator said the figure is more than its entire programming budget for a single year, according to its lawsuit, parts of which were unsealed yesterday.
Cablevision, controlled by the Dolan family, is suing Viacom for allegedly forcing it to carry a raft of lower-rated networks like Logo and CMT in order to gain access to more popular networks such as MTV and Comedy Central.
Viacom argues there was no penalty; rather Cablevision is complaining about paying the going rate for individual networks after choosing to forgo the big discount distributors get for buying the entire bundle.
In short, the $1 billion figure reflects the absence of the discount over the life of the contract, according to Viacom. Programmers typically negotiate five-year deals with distributors.
Viacom said Cablevision’s calculations are “rhetorical math manufactured to create artificial sticker shock.”
Cablevision also pointed out that most of Viacom’s channels have been losing viewers even as it asks for bigger fees.
“Viacom’s power to coerce Cablevision is vividly illustrated by Viacom’s ability to extract higher prices for networks that nonetheless are experiencing ratings declines,” Cablevision said in court papers.
A Viacom spokesman defended the channels: “The very same networks they claim have declined are the networks they’re describing as must-haves.”
Viacom also accused Cablevision of being “hypocritical.” Cablevision and other pay-TV companies have been accused of “tying,” or requiring customers to rent its cable boxes in order to receive “two-way” interactive services.