The 95% is when there was only 1 tier. What was the percentage after people were given the option.
The term "Tier" means nothing to the agreement since it is up to Dish Network how they sell their programming packs. However, (don't quote me on this) VOOM had to be available to 95% (penetration requirement) of all DishHD subs during the first year, and at least something like 81% during the 15th year of the contract. It is almost impossible for E* to create HD Tiers without including VOOM in the basic package in order to meet the penetration requirement. I think the figures thrown out there (court filings) were 200k HD subs in 2005, 2M HD subs in 2008, and up to 11M DishHD subs by 2015. Additionally, E* was paying something like $3.25 to VOOM per HD subscriber in 2005 (1st year)...with annual increases to where they would be paying VOOM close to $6.50 per subscriber per month in the 2020 (final year of the contract).
Let's assume E* has 11M sub (VOOM's estimate) in 2015 (makes sense since everything is going digital and HD) and the penetration rate is 85% and E* is paying $4.85 per HD sub per month (quick ballpark estimate). That means E* would be paying VOOM 45.35 million dollars per month or more than 544 million dollars per year. Yikes! As much as I like VOOM, it is not worth 544 million dollars which, under the terms of the Affiliation Agreement, E* would be required to pay in 2015 and beyond.
Also, it was posted elsewhere that ESPN will take in more than 2.5 billion in retrans revenue in 2009. Assuming VOOM were carried by all MSOs under the same terms as their agreement with E*, they would expect to rake-in over 6 billion dollars in retrans revenue in 2015. This is just an in-the-ballpark estimate, but hopefully you can see what a bad deal this was for E*. I think E* assumed that VOOM would give them a huge competitive advantage the first 2-3 years (it didn't), that they could share royalties or enjoy more favorable terms when the VOOM channels were mass-marketed like the AMC, IFC and WE (it never happened). Instead, no cable operators had room or VOOM's 15-channel lineup, nobody wanted to pay 3.25-6.50 for VOOM (premium price when HD was no longer a premium service), and VOOM decided E* was their Sugar Daddy so they turned their attention to developing International markets. I am sure this pissed-off Mr. Ergen like you couldn't imagine.
This really is a simple matter...did VOOM meet the "Spend Requirement"? If so, then E* violated Section 4 of the Affiliation Agreement by re-tiering VOOM on 1 Febuary 2008 and subsequently illegally terminating the agreement. The courts will then have to compensate VOOM for the remaining 12 years of the contract, legal fees, and damages.
If VOOM did not meet the Spend Requirement, E* was within their right to terminate the agreement and VOOM will have to pay legal fees and damages. Offhand, I cannot see how Rainbow Media management would be so careless since it was in their best interested to meet all obligations in order to enjoy the huge payday that was coming.
The way I see it is that VOOM had no reason not to meet the spend requirement, and E* had every reason to break the agreement after VOOM would not renegotiate more favorable terms. To be honest, even if E* loses in court...it will probably cost them far less than paying VOOM for another 12-years.