• Reuters, Friday, March 23, 2007 11 AM

Libery Media Holding Corp., the folks behind DirecTV and other satellite services, said it was suing The Walt Disney Corp. for allowing movie download services to sell titles the media giant licensed exclusively to its cable network, Starz Entertainment.

The movie company brought the suit directly against Disney's Buena Vista Television unit, which inked deals to sell movies on Apple's iTunes as well as Wal-Mart's new movie download store. Starz says that under a 2005 licensing agreement, Disney is barred from selling certain films over the Web, such as the blockbuster "Pirates of the Caribbean: Dead Man's Chest," for a certain amount of time, per an exclusivity clause in the 2005 contract. Since 1993, Starz has paid Disney more than $1 billion for such rights, according to the suit.

"Our issue is that the contract has a clear prohibition from them doing this and we gave them notice, had a number of exchanges and had meetings and they denied our request for relief," Starz Entertainment Chairman and Chief Executive Robert Clasen told Reuters on Thursday. "We are absolutely adamant in protecting our contractual rights and licenses," he added. BTV for its part says Starz "misread its agreement" and claims the suit "is without merit."

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