Univision has filed suit against Charter Communications (NASDAQ: CHTR), alleging the MSO is improperly leveraging its just-closed acquisition of Time Warner Cable to avoid negotiating a new carriage deal with the Hispanic-targeted programmer.
Univision said it has been trying to renegotiate an expiring carriage deal with Charter for months, but the cable company said TWC is now running its cable system, and TWC's deal with the programmer — which runs through 2022 — now applies to New Charter.
Charter is alleged to have told the programmer that "distribution of the Univision services shall be pursuant to the terms of the TWC agreement."
Univision alleges Charter is using its merger "as a pretext to unilaterally impose license fees that are dramatically below current market license fees."
Charter has responded with this statement: "We have a long-term contract with Univision, and we expect them to honor it."
Univision also said it was told by Charter that TWC is managing its cable system. "But everyone knows that is simply not true: the longstanding CEO and the senior executive team of Charter, as well as its pre- existing board of directors, now in fact manage and control all such cable systems, and virtually the entire TWC leadership team has departed," the suit said.
Univision said that under its deal with Charter, should a merger occur, the deal terms with TWC remain in place, but only until the end of the calendar year in which the deal closed — in this case, 2016.
Univision said Charter is not living up to promises made during the regulatory review of its $71.4 billion purchase of TWC.
"Quite simply, Charter promised one thing publicly in order to secure approval for its acquisition and is now privately claiming the exact opposite to Univision," a Univision rep told the Wall Street Journal.
The Univision complaint comes after Charter promised investors $500 million in savings across its combined assets in the first year.
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