A $100 million lawsuit filed by a small programmer that claims that AT&T (NYSE: T) broke promises made to the company in exchange for merger lobbying efforts will head to trial.
A California federal court refused to throw out the case filed in March by Herring Communications, operator of One America News Network (OAN) and AWE (A Wealth of Entertainment).
"We are very pleased with this decision upholding all our claims and keeping the parent company, AT&T, Inc., in the case as a defendant. The business of our client has been egregiously harmed, by over 100 million dollars, and we look forward to putting the case on to a jury. In addition, we will be seeking punitive damages from AT&T based on our tort claims," said Herring attorney Skip Miller, in a statement.
In its breach of contract suit, Herring claims that it wasn't told while it was negotiating a new U-Verse carriage deal in the regulatory run-up to AT&T closing its $49 billion purchase of DirecTV that AT&T would soon be de-emphasizing the telco pay-TV platform.
In the second quarter, AT&T lost 391,000 U-verse subscribers while adding 342,000 DirecTV customers.
Further, Herring claims that it was promised a sweet DirecTV carriage deal if it did a little lobbying for AT&T's big merger.
"Telco video providers AT&T U-verse TV and Verizon FiOS TV have a long, well established reputation of providing independent programming networks fair consideration when it comes to carriage decisions," said Herring CEO Robert Herring, in a statement released several days after AT&T's deal was announced.
Herring said it was promised a five-year carriage deal yielding about 12 cents a subscriber, covering about 85 percent of DirecTV's base. The deal, it said, would have produced as much as $25 million a year in revenue.
Responding to FierceCable, AT&T recycled its statement from March: "We have offered to carry both channels on DirecTV at reasonable, market-based terms. This lawsuit is simply a ploy by Herring to negotiate a slanted deal."
AT&T sued for $100M by indie programmer for allegedly reneging on DirecTV carriage promise
AT&T adds 342K DirecTV subscribers in Q2, loses 391K U-verse TV subscribers