11/7 9pm Eastern Update: A deal has been made and these networks are back on AT&T U-verse.

via press release:
AT&T U-verse drops HGTV, Food Network other family-friendly networks from its channel lineup

U-verse refuses contract extension to keep popular lifestyle channels on air

KNOXVILLE, Tenn.—-In a surprising move after weeks of positive negotiations, AT&T U-verse refused a third extension offered by Scripps Networks that would keep the family friendly networks HGTV, DIY Network, Food Network, Cooking Channel and Great American Country on the air while negotiations continued. The decision by AT&T disrupted service to the telecom provider’s 2.7 million customers, leaving them without some of the most popular lifestyle networks on television.

“Let me start by saying this impasse is not about money,” said John Lansing, President of Scripps Networks. “We reached an agreement in principle with AT&T U-verse on the distribution fees we would receive for these networks well in advance of last month’s contract deadline.”

Lansing added that AT&T refused an offer early Friday morning to extend the existing contract through the end of this year in order to allow negotiations to continue and resolve any outstanding business issues.

“This is something we worked hard to avoid,” Lansing said. “We are shocked and disappointed that AT&T U-verse would rather deprive its customers of fan favorites like HGTV, DIY Network, Food Network, Cooking Channel and Great American Country than continue to negotiate in good faith.”

The remaining issues involved in the negotiations revolve around AT&T U-verse’s demands to use Scripps Networks’ video – video that was created specifically for its lifestyle networks and video that Scripps owns – in ways that go beyond normal business practices.

“AT&T U-verse demanded unreasonably broad video rights for emerging media where business models have not even been established,” Lansing explained. “Accepting their demands would have restrained our ability to deliver our content to our viewers in new and innovative ways.”

HGTV, DIY Network, Food Network, Cooking Channel and GAC are available to viewers through every other cable, satellite and telecom provider. Lansing said that, should AT&T U-verse decide to resume discussions, Scripps remains committed to continuing in good faith negotiations in order to bring back its networks to ATT U-verse customers.

About Scripps Networks

Scripps Networks comprises lifestyle television brands HGTV, DIY Network, Food NetworkCooking Channel, Travel Channel and country music network Great American Country (GAC). Scripps is the dominant media and marketing company in the home, food and lifestyle categories, developing content for television and the Internet, where on-air programming complements an array of broadband video, social media areas and e-commerce components on companion websites that attract more than 18 million unique visitors each month. Scripps Networks is owned by Scripps Networks Interactive Inc. (NYSE:SNI), a leading developer of lifestyle-oriented content for television and the Internet.

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Here’s AT&T’s side:

We’re extremely disappointed that Scripps Networks won’t provide a fair deal for AT&T customers. Our team has been working for weeks to reach a fair agreement, but Scripps Networks ultimately refused to put in writing key terms that had been agreed upon verbally, leaving our customers without a fair deal as our extended contract expired.

Unfortunately, this is yet another example of a network punishing its own viewers for leverage in programming negotiations. Scripps Networks is demanding that AT&T pay double what other competitors pay — including smaller-sized affiliates — and has yet to provide a proposal that gives AT&T a choice in the channels we carry and pay for, despite repeated requests.

Scripps Networks also wants this premium price for inferior access to their content for our customers on other platforms, even though other competitors get this at much lower prices. With such an uneven playing field, they are harming AT&T’s ability to provide customers with a new video choice.

We will continue to fight for a fair deal to bring these channels back to our lineup because our customers deserve the programming they want, at a fair price.

Posted by:TV By The Numbers

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