AT&T has responded to a bombshell lawsuit filed by the U.S. Justice Department accusing the conglomerate’s DirecTV unit of orchestrating an illegal campaign to block wide carriage of regional sports network SportsNet LA, home of the L.A. Dodgers.
“We respect the DOJ’s important role in protecting consumers, but in this case, which occurred before AT&T’s acquisition of DirecTV, we see the facts differently,” said David McAtee, AT&T general counsel, in a statement. “The reason why no other major TV provider chose to carry this content was that no one wanted to force all of their customers to pay the inflated prices that Time Warner Cable was demanding for a channel devoted solely to L.A. Dodgers baseball. We make our carriage decisions independently, legally and only after thorough negotiations with the content owner. We look forward to presenting these facts in court.”
Time Warner Cable launched SportsNet LA on the back of a 25-year, $8.35 billion licensing deal with the Dodgers in early 2014. To date, the Southern California region’s No. 2 pay-TV operator, DirecTV, has refused carriage of the channel. No other pay-TV operator of influence in the region, outside TWC (now operating under Charter’s Spectrum brand) has signed on, either.
On Wednesday, the DOJ filed suit in a Los Angeles federal court, accusing DirecTV of influencing other pay-TV companies to avoid signing onto the channel as well. The suit was obtained by the Los Angeles Times.
"Dodgers fans were denied a fair competitive process when DirecTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team," Deputy Assistant Attorney General Jonathan Sallet of the Justice Department's antitrust division said in a statement. "Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace.”
The suit comes at a time when AT&T is trying to secure regulatory approval from the DOJ and FCC for its proposed $85.4 billion takeover of media company Time Warner Inc. As for the SportsNet LA carriage disputes, its roots extend well past the point at which Charter purchased TWC and AT&T bought DirecTV.