Delay in Disney, EchoStar Legal Battle

EchoStar Communications Corp. and Walt Disney Co. agreed to postpone a hearing so they can pursue settlement talks over whether the satellite-TV service must continue to carry the ABC Family channel.

The companies asked a federal judge in Los Angeles to delay the hearing by one week until March 18, said Disney spokesman Eric Hollreiser.

“We’ve been continuing conversations with EchoStar in hopes of reaching a negotiated settlement,” Hollreiser said. EchoStar spokeswoman Judianne Atencio declined to comment on the postponement.

If EchoStar axed the network, Disney would lose 6.4 million of ABC Family’s 84 million subscribers and drop it from the 11th to the 22nd largest advertising-supported network. The dispute comes as EchoStar’s trying to win regulators’ approval to buy Hughes Electronics Corp., owner of the DirecTV service, for $33.2 billion. That would create a satellite broadcaster that will reach 90% of the U.S. market.

Littleton, Colo.-based EchoStar in December moved to drop ABC Family from its service, claiming Disney’s $5.2-billion purchase of ABC Family from News Corp. and children’s TV producer Haim Saban voided a 1995 distribution agreement. Burbank-based Disney has argued EchoStar doesn’t have the right to drop ABC Family, formerly known as the Fox Family channel, until 2005.

U.S. District Judge Gary Allen Feess on Dec. 31 ordered EchoStar to continue carrying ABC Family. The next hearing is to determine whether that order should be extended until a trial.