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Cablevision founder testifies in Dish trial

The Cablevision Systems Corp. headquarters in Bethpage. (Nov.

The Cablevision Systems Corp. headquarters in Bethpage. (Nov. 19, 2010) Credit: Bloomberg News

Cablevision founder Charles Dolan told a Manhattan jury on Monday that his company spent millions on a long-term satellite television deal before Dish Network Corp. abruptly scrapped the deal.

"We had an agreement. We spent what for us was very precious financial resources," Dolan said under questioning by Cablevision attorney Orin Snyder.

Dolan, 85, chairman of the Bethpage company, is the first witness to testify in Cablevision’s $2.4 billion breach-of-contract case against Dish being tried in State Supreme Court in Manhattan.

A former Cablevision unit, Voom HD, filed the lawsuit in 2008, accusing a Dish affiliate, EchoStar Corp., of breaking the 15-year satellite television agreement between the companies. Cablevision, which owns Newsday, is seeking $2.4 billion in lost revenue and damages.

Dish, based in Englewood, Colo., says it pulled out of the deal because Cablevision failed to spend a required $100 million annually to develop high-definition programs. Cablevision denies that charge and says Dish unlawfully tried to back out of a deal it no longer liked.

One of the key issues for jurors to decide is how Cablevision was allowed to spend the $100 million under the contract. Cablevision argues it was allowed to spend on salaries, marketing and other expenses. During his testimony, Dolan said the breadth of permissible expenses was explicitly clear.

"There wasn't much question about how much money would be spent and what it would be spent for," Dolan said.

Dish, however, says every cent should have been for programming.

The trial, before Justice Richard B. Lowe III, is likely to last several weeks. Dish chairman Charles Ergen is expected to testify.

In the run-up to the trial, Dish declined to renew its contract to broadcast programs from Cablevision affiliate AMC, including “Mad Men” and “Breaking Bad.” AMC accused Dish of dropping its channels to gain an upper hand in settlement talks. Dish said it dropped the AMC channels for financial reasons.

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