Disney Response to EchoStar Statement of January 2, 2002

* Today, EchoStar has abandoned all of its court arguments for dropping ABC Family and has created a new set of allegations against Disney. Its statement today merely emphasizes the fact that its real reason for breaching its contract and attempting to illegally remove ABC Family from its system is all about rates and has never had anything to do with the change of control issues that are the heart of the legal action. Nor does it have anything to do with the claims it makes in its very own court filings regarding its alleged need for additional bandwidth.

* Disney sought to negotiate issues with EchoStar that would have reduced fears that Disney shares with regulators and public interest groups regarding EchoStar's penchant for wielding monopoly power in unfair ways. Instead, EchoStar has taken actions that show the danger to consumers of having only one DBS provider. Indeed, in its court filing, EchoStar cynically states that consumers who want ABC Family have the choice of DirecTV. That, of course, is the alternative that EchoStar's acquisition of DirecTV will eliminate for both consumers and programmers.

* Also, In its court filings, EchoStar claimed that it had to drop channels in order to have sufficient bandwidth to call 250 local channels as of January 1 of this year. The argument would seem to be false in that the only channel it has actually dropped is ESPN Classic, and presumably, EchoStar is now carrying all 250 local channels. Apparently, bandwidth is not an issue for the satellite service.

* EchoStar also continues to misrepresent the legal case as one about programming change. In fact, the dispute centers on contractual language regarding change of corporate control. Disney maintains that no such change of control has taken place - although programming is changing for the better - and thus EchoStar is attempting to illegally breach its contract.

* It is an absolute fabrication for EchoStar to claim that Disney has sought price increases for ABC Family. In fact, Disney has never sought such increases. The pricing structure remains the same as defined by the 1995 contract - except that we are providing improved programming.

* EchoStar's complaints regarding the programming on ESPN Classic are entirely disingenuous. In fact, EchoStar offered to continue carrying the network on its system if ESPN would provide the service for free.

* EchoStar's complaints regarding ESPN also are misleading. In fact, the price paid by EchoStar for ESPN is essentially identical to the price paid by other providers. Indeed, EchoStar previously signed long-term distribution agreements for ESPN, ESPN2 and ESPNEWS containing the very rate adjustment provisions about which they now complain.

* According to industry surveys, ESPN networks are the number one driver of subscriptions and revenue for affiliates among all basic cable networks. ESPN's affiliate rate is a wholesale cost which does not reflect the value and revenue affiliates derive which help offset a significant portion of that cost. ESPN offered EchoStar the opportunity in negotiations to fully realize that value. EchoStar has signed long-term agreements for ESPN, ESPN2 and ESPNEWS which include already agreed upon affiliate rate provisions.