Starz Entertainment Sues Disney for Copyright, Contract Violations

Suit Centers on Disney Decision to License Apple, Wal-Mart to Sell

Electronic Movie Downloads Over the Internet, Violating Exclusive

Agreements With Starz

Mar 22, 2007, 01:00 ET from Starz Entertainment, LLC

    LOS ANGELES, March 22 /PRNewswire/ -- Starz Entertainment, LLC, today
 filed suit against Buena Vista Television (BVT), a subsidiary of The Walt
 Disney Co., for copyright infringement and breach of contract. Starz filed
 the suit in the US District Court for the Central District of California
 because Disney recently began to sell for transmission over the Internet
 the same movies that Disney licensed exclusively to Starz.
     Under the terms of the 1993 and 1999 Starz-BVT agreements, extended by
 BVT in 2005, Disney is prohibited from selling its films for transmission
 over the Internet prior to Starz's first exclusive license period and
 during all of Starz's exclusive license periods.
     Despite this prohibition, the suit notes that Disney has "begun to sell
 over the Internet via services like Apple Computer Corp.'s iTunes and (Wal-
 Mart Corp's) the very same Disney films licensed to Starz."
 Such conduct, the suit adds, constitutes "a blatant breach" of the
 licensing agreements between BVT and Starz. The suit notes that over the
 life of the contract Starz has paid "over one billion dollars" for periods
 of exclusive rights to the films.
     Starz Entertainment Chief Executive Officer and Chairman Robert B.
 Clasen said, "Disney has been a great partner. We hope to continue our
 relationship. But our agreements clearly prohibit them from selling their
 movies by electronic download over the Internet while they are exclusive to
 Starz. If Disney is permitted to violate our contract in this manner, it
 will undermine the integrity of copyright in general which is a cornerstone
 of our industry."
     Clasen added, "The film studios have been very aggressive, and quite
 rightly so, in protecting their copyrights, particularly with regard to the
 Internet. Starz must be equally aggressive in protecting the value of the
 deal it made. It is especially disappointing to see one of the largest
 studios ignore so blatantly its own contractual obligations to protect the
 copyrights it has licensed to Starz."
     Clasen pointed out that Starz has been a pioneer in Internet delivery
 of films, investing millions of dollars to develop, launch and market its
 Internet service last year. Starz delivers more than a thousand movies per
 month -- including the Disney films -- to subscribers via broadband
 Internet connections. "We want to encourage consumers to have every
 opportunity to access a wide array of films over the Internet," Clasen
 said. "But we cannot allow Disney to sell those rights to us on an
 exclusive basis and then sell the same rights to other parties."
     The suit notes that the licensing agreements do allow Disney to
 distribute its films on a pay-per-view or on-demand basis defined as "the
 viewing of a motion picture by a consumer who is charged a fee to view the
 film over a limited period of time." It also permits home video
 distribution where consumers may purchase or rent "a motion picture
 embodied in a video device which is a physical entity (including, without
 limitation, video cassette, laser video disc and DVD)."
     But the suit points out that -- other than these clearly defined
 exceptions -- the agreements prohibit BVT from licensing its films "for
 exhibition in any form of television or electronic delivery."
     The suit seeks to prevent BVT "from continuing to infringe on Starz's
 rights" and asks for all profits BVT has realized from its infringing
     Starz Entertainment is the exclusive subscription television and
 broadband provider of first-run films from leading Hollywood studios
 including Walt Disney Pictures, Sony Pictures Entertainment, Overture
 Films, Revolution Studios, Miramax Films, Touchstone Pictures, Hollywood
 Pictures, Pixar, TriStar, Screen Gems, Sony Classics and Warren Miller
 Films. Select first-run theatrical films from The Weinstein Company, IFC
 and Yari Film Group are also available for subscription television and
 broadband exclusively on Starz Entertainment services. A vast collection of
 classic and favorite titles are provided by a wide array of other Hollywood
     As one of the largest content aggregators in Hollywood, Starz
 Entertainment has access to thousands of theatrical films that it makes
 available on the Starz services and Vongo including The Chronicles of
 Narnia: The Lion, the Witch and the Wardrobe, Silent Hill, Sin City, The
 Wild, The Aviator, Hitch, Bewitched, and Fun with Dick and Jane. Movies
 coming later in 2007 to Vongo subscribers includes, The Da Vinci Code,
 Cars, Talladega Nights: The Ballad of Ricky Bobby, and Pirates of the
 Caribbean: Dead Man's Chest.
     About Starz Entertainment
     Starz Entertainment, LLC, is a premium movie service provider operating
 in the United States. It offers 16 movie channels including the flagship
 Starz(R) and Encore(R) brands with approximately 15.5 million and 27.3
 million subscribers respectively. Starz Entertainment airs more than 1,000
 movies per month across its pay TV channels and offers advanced services
 including Starz HD, Starz On Demand and Vongo(SM). Starz Entertainment
 ( is an operating unit of Starz, LLC, which is a wholly owned
 subsidiary of Liberty Media Corporation that is attributed to Liberty
 Capital Group (Nasdaq:   LCAPA, LCAPB).
     Tom Southwick
     Starz Entertainment
     (720) 852-5821(303) 513-3758 (cell)

SOURCE Starz Entertainment, LLC