HDNet Sues DirecTV For Repricing Move

By Greg Tarr -- TWICE, 11/9/2007 1:30:00 PM

New York — Flamboyant billionaire Mark Cuban’s high-definition TV network HDNet has filed suit to block DirecTV from moving its two channels — HDNet and HDNet Movies — to a new premium HD tier next month, TWICE sister publication Multichannel News reported.

HDNet said such a move “is in gross violation of their contractual obligations,” and will “effectively kill HDNet’s viewershp by moving the two broadcast package — where the channels are distributed to more than 2 million households — to a newly created obscure and overpriced package that puts the HDNet channels well beyond the reach of the average television viewer.”

According to the lawsuit, which was filed in U.S. District Court in Dallas last Friday: “After using HDNet as the critical lynchpin to establish DirecTV as the industry leader for high-definition broadcasting, DirecTV is now embarking on an unlawful campaign to destroy HDNet and to usurp its position in the market?”

HDNet said DirecTV is seeking to replace its channels in the lower-priced tier with their own programming and that of their favored partners, Liberty Media and entities controlled by Liberty's chairman John C. Malone, who is moving to acquire control of DirecTV from News Corp.

HDNet is asking the court to block the move and for unspecified damages.

On Dec. 15, DirecTV is planning to move its HDTV channels that do not have an identical standard definition version into an additional HD programming package called the “HD Extra package.” The lineup will include long-time HD offerings HDNet and HDNet Movies, in addition to the recently added MGM HD, Smithsonian HD and MHD.

The package will cost $4.99 per month, on top of the $9.99/month fee charged for DirecTV’s regular HD package, making the new price for a complete national HD package $14.98.

In a statement, DirecTV denied HDNet’s allegations saying: “We are disappointed that our business partner would ignore the plain language of our agreement and file an unnecessary lawsuit coupled with a request for the unwarranted, extraordinary relief of a temporary restraining order. They have not provided any concrete evidence to support their claims. We are acting in accord with our agreement with HDNet and we will defend the lawsuit vigorously.”