Cablevision-Viacom battle echoes Malone-Redstone fight

John Malone, left, and Sumner Redstone
(Associated Press (Malone) and Michael Robinson Chavez / Los Angeles Times (Redstone)
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The more things change, the more they stay the same.

On Tuesday, Viacom, parent of MTV, Nickelodeon and Comedy Central, was accused in a lawsuit filed by New York-based cable operator Cablevision Systems Corp. of engaging in anti-competitive and monopolistic business practices. The suit, filed in federal court in New York, charges that Viacom unfairly leverages the strength of its strong networks to get distribution for its weaker channels.

“Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want,” the suit said, adding that such behavior is an abuse of market power and does irreparable harm to the pay-TV industry.

These accusations probably sound familiar to veteran Viacom executives as they are very similar to the ones it made against cable mogul John Malone 20 years ago.


At that time, Malone was backing an effort by Barry Diller to acquire Paramount Communications, which Sumner Redstone’s Viacom also coveted. Viacom filed a suit to block the deal, arguing in part that Malone -- who at that time was the biggest cable operator in the United States -- was engaged in a “conspiracy to monopolize” the industry and routinely violated antitrust laws.

Specifically, Viacom said Malone had too much control over distribution and used that leverage to force programmers into unfair deals.

The battle for Paramount was long and ugly, but the suit ultimately went away and Viacom ended up owning the studio. Malone didn’t go away empty-handed, though. His cable company bought cable systems that Viacom owned, which gave him even more power.


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