In a highly one-sided statement released Tuesday afternoon, direct broadcast satellite company DirecTV “took a stand for its customers” by mounting a legal challenge against what it calls “a conspiracy” among three broadcasters to illegally increase content costs for free over-the-air TV.
The matter involves the No. 1 owner of broadcast television stations in the U.S.
And, it is tied to retransmission consent squabbling between DirecTV and licensees White Knight Broadcasting and Mission Broadcasting, each of whom enjoy shared services agreements with Nexstar Media Group.
With retransmission fees a lucrative revenue source for television broadcasting companies, DBS providers Dish and DirecTV have been the biggest distributors of local TV stations to balk at what broadcasters believe is fair compensation for stations that have committed to local news and live programming viewers crave in their communities.
For DirecTV, these fees “have soared more than 5,000% in the past 17 years and is the single largest source of rising costs facing video consumers today.”
Yet, DirecTV — and, for that matter, organizations such as ACA Connects and the pro-MVPD lobbying group ATVA — have not explained why it must automatically raise subscription rates rather than review corporate expenses or executive compensation.
Instead, DirecTV has systematically pointed fingers at the broadcast TV owner. And, it is very much doing so again by way of a lawsuit filed on Tuesday in U.S. District Court for the Southern District of New York.
In the lawsuit, DirecTV charges that Nexstar Media Group has violated federal antitrust law by engaging in “an illegal conspiracy” with Mission Broadcasting and White Knight Broadcasting “to manipulate, raise and fix the prices of so-called retransmission consent fees that DirecTV must pay to offer ABC, CBS, NBC, and FOX local stations.”
While that is open to interpretation and the court will undoubtedly hear from Nexstar legal counsel with a wholly different version of the facts at hand, DirecTV asserts, “When any distributors resist extreme rate increases, Nexstar and other broadcast giants act as a gateway to black out key content from consumers living within any regions they are exclusively licensed to serve, and levy far higher tolls to bring that programming back.”
Since October 7, 27 local stations have been prevented, by law, from being consumed by DirecTV, DirecTV Stream and U-Verse customers. These are stations Nexstar has a SSA with but are not owned by the company.
Yet, “collusive retransmission consent negotiations with ‘sidecar’ station groups that it manages” are the reason, as DirecTV sees it.
The suit charges both White Knight and Mission allow their respective retransmission consent negotiations to be overseen, administered and subject to the approval of Nexstar in direct violation of applicable laws.
Asked for comment, a Nexstar spokesman told RBR+TVBR, “Nexstar’s shared services agreements with White Knight and Mission Broadcasting are in full compliance with FCC rules, and each station group independently negotiates its own retransmission consent agreements with its cable, satellite, and telco partners. This lawsuit is without merit and Nexstar looks forward to prevailing in court.”
Legal record of this case is available at the U.S. District Court for the Southern District of New York. Read the redacted complaint here.
