AT&T U-Verse Drops Hallmark Channels

The impasse in the negotiations between AT&T U-Verse and Crown Media, the parent company of the Hallmark Channel and the Hallmark Movie Channel, over a new carriage agreement resulted in the two channels gong dark for 2.3 million subscribers at 12:01 AM EDT tonight when the two sides’ previous deal expired. Here are the statements by AT&T and Hallmark Channels:

AT&T: We are very disappointed that Hallmark has refused to provide AT&T and its customers with a fair deal one that is no worse than similarly-sized and smaller providers and refused to adhere to key obligations under our current deal. We offered to extend the current deal while talks continued, and Hallmark rejected that offer. We don’t want customers to lose their programming, but we believe strongly that our customers should not have to pay more than their fair share for Hallmark’s channels, which is exactly what Hallmark is demanding.”

AT&T U-verse will replace the two Hallmark channels with a free preview of programming from Starz Kids & Family and Turner Classic Movies. According to Crown, negotiations hit a standstill as of Aug. 26.

Hallmark Channels is willing to re-start negotiations toward the distribution agreement as long as they are fair and in good faith. “I was stunned by the apparent disregard for the facts in AT&T’s recent statement regarding our negotiations,” said Bill Abbott, president and CEO of Hallmark Channels. “However, if they are really serious, my team and I are ready for truly fair negotiations.”

Hallmark Channel plans to launch a daytime lifestyle programming block from Martha Stewart Living Omnimedia on Sept 13 with the sixth season premiere of The Martha Stewart Show. In July, AT&T U-Verse was in a similar carriage dispute with AMC parent Rainbow Media, which threatened the current fourth season of Mad Men, but the two companies ultimately reached an agreement without dropping channels. At midnight tomorrow night, the deal between Disney and Time Warner Cable expires but the two sides over the weekend made it clear they are very close to a deal, so no blackout is expected their either.

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