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Cable Provider Ordered to Pay Disney Networks

(CN) - Dish Network's parent company must pay interest to Disney networks after making late payments due under programming licenses, a New York appeals court ruled, rejecting the broadcaster's claims that Disney failed to provide high-definition versions of ESPN programming or waived the right to interest.

EchoStar Satellite, which operates the Dish Network direct broadcast satellite system, filed the lawsuit regarding the high-definition versions of the Disney Channel, Toon Disney, SOAPNet, ABC Family and the ESPN group of sports channels.

The trial court ruled in Disney's favor, and the justices of the Manhattan-based appeals court's first department affirmed the decision, citing ambiguity in the contracts.

"EchoStar's contention that the contracts unambiguously provide that it bargained for and obtained the right to distribute all of the high definition 'feeds' of the licensed networks is ... unpersuasive, if for no other reason than the word 'feed' is not defined in the contract, and in the context presented, is not readily susceptible to one meaning," the justices wrote.

The appellate division also affirmed the lower court's ruling that that Disney did not waive its right to collect interest when it accepted late payments from EchoStar.

"That was a right reserved to it in agreements negotiated between both parties, each of which had equal bargaining power, presumably so that if, in the event EchoStar did pay late, it would not gain a windfall by enjoying whatever return on investment could have otherwise been realized by Disney," the opinion states.

Disney was not named as a defendant in the lawsuit, but the networks in question are under the Disney umbrella of cable channels.

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