In latest news, Univision cable company has sued Charter for violation of contract. Charter’s acquisition of Time Warner Cable two months ago boosted its audience from 4.3 million to 17 million, and the deal is now in a tug-of-war with Univision.
Univision, being the largest distributor of Spanish language broadcast in the country, filed a lawsuit in court, claiming that Charter is “flagrantly breaching Univision’s contract with Charter by using the acquisition as a pretext to unilaterally impose license fees that are dramatically below current market license fees for Univision’s valuable content.”
Charter’s contract with Univision to carry its channel expired on June 30, but there latest acquisition Time Warner Cable had a contract with Univision that extends to 2022. Both sides are claiming that they are acting on behalf of their viewer’s interest. The lawsuit also claims that Time Warner Cable was paying less for Univision’s channels on a per subscriber basis.
Exact financial terms have not yet been known, but according to Charter, the contract of Univision with Times Warner Cable should remain intact now that the merger is complete. One of the justifications by Charter is that the company is much more equipped after the merger to resist channel owner’s demands for increasing the rates of the channels.
Univision, in contrast, is more inclined to negotiate the terms proposed by Charter and expects to earn higher fee per subscriber for its distributed channels. According to Univision, the reason for increasing the channel fee now is that the subscriber fees help them to produce more and more shows for viewers and parent companies. However, this could result in higher cable bills.
Disputes between distributors and programmers are common these days, but breaching of contracts are very rare. Charter official said, “We have a long-term contract with Univision and we expect them to honor it.”
The latest tug of war between two areas of television business is getting too much attention. If the lawsuit turns in favor of Charter, their acquisition of Time Warner Cable could become more profitable, as they will get access to Univision channels until 2022 without renewing the contract or by accepting the distributors demand to increase pay per subscriber charge.