Time Warner and Cablevision Systems are close to settling their dispute over carriage of AMC.
Time Warner has threatened to drop the Cablevision-owned network over its format change from old classic movies to more contemporary ones. Time Warner sued for a declaration that AMC had breached a contract that said it would be a "classic" channel. A New York State judge handed Time Warner a complete victory two weeks ago, but Cablevision said it planned to challenge the ruling.However, at a Friday court hearing to discuss Cablevision's appeal, both companies asked for a delay, telling the judge they were discussing a settlement.Networks changing their content is a pet peeve of Time Warner Cable's chief programming negotiator, Fred Dressler. But industry executives widely saw Time Warner's suit as an attempt to reduce the license fees paid to AMC, currently around 23 cents per subscriber per month. Analysts expect Time Warner to secure a 15%-20% reduction for each of its 11 million subscribers. That could crunch AMC, particularly because the network may in turn have to reduce prices to other large cable and DBS operators who have "most favored nation" clauses in their carriage agreements. Those clauses guarantee that they'll get the best or nearly the best rates of any distributor.AMC stands to lose at least 11 million of 87 million subscribers if Time Warner actually drops the service. According to one analyst, it could also los another 3 million Adelphia Communications Corp. subscribers, which Time Warner is buying.