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Weil Secures Major Trial Win for ESPN in Contract Dispute with Dish

Diane Sullivan and David Yohai persuade a federal jury to reject nearly every claim in the $152 million suit
Weil litigators today achieved a significant victory on behalf of our client ESPN, Inc. in a lawsuit involving the terms of distribution agreements the sports program provider had negotiated with satellite-TV operator Dish Network L.L.C. and its competitors. A jury in the U.S. District for the Southern District of New York returned a verdict rejecting three of the four breach-of-contract claims Dish had asserted in its complaint and the vast majority of the monetary damages it had requested. Dish had claimed damages of more than $152 million, but was awarded a small fraction of that amount, $4.86 million. A spokeswoman for ESPN, which is majority-owned by Walt Disney Co., said the company was “gratified” by the result, Reuters reported.

Filed in 2009, the suit claimed that, among other things, ESPN had violated a most-favored-nation (MFN) provision of its 2005 licensing agreement with Dish that required ESPN to offer the satellite-TV operator the same licensing rates and program bundling opportunities offered to competitors. Dish claimed that ESPN had instead offered competitors better rates for the ESPN Classic channel, which rebroadcasts older sports events, and the Spanish-language ESPN Deportes channel and had allowed a cable operator to stream ESPN programming online without charging additional fees, an arrangement that Dish claimed it had not been offered. Dish later amended its complaint to include, among other things, an allegation that ESPN violated a separate provision of the parties’ contract by allowing Time Warner Cable to distribute the ESPN Network over the Internet via the popular “WatchESPN” app without charging a separate fee.

After a three-week jury trial in the Southern District of New York, Weil litigators prevailed on virtually every claim brought by Dish. The jury rejected Dish’s largest claims, including a claim for $130 million that ESPN owed Dish an MFN offer with respect to the ESPN Classic channel based on ESPN’s 2006 deal with Comcast; found in ESPN’s favor with respect to Internet streaming rights; and rejected Dish’s claims that ESPN violated the MFN by offering other distributors “a la carte” offerings.

As to one smaller claim, concerning the Spanish-language channel ESPN Deportes, the jury awarded Dish a mere $4.8 million, a fraction of the total amount sought. ESPN also previously won a related case for over a hundred million dollars, which Dish has now paid to ESPN and Disney .So, after bringing two cases against our clients, Dish has now lost $133 million, has been ordered to pay our clients our attorneys’ fees, and will now owe our clients additional attorneys’ fees in connection with the numerous additional claims Dish lost at this trial.

The Weil trial team consisted of partners Diane Sullivan and David Yohai; New York associates David Yolkut, John Gerba, Jennifer Oliver, Amanda Vrecenak, and Emily O’Hern (now of Houston); and Princeton associate Adam Tolin. Ted Tsekerides and David Singh contributed significantly to the pretrial work.

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Legalese