DirecTV illegally shared SportsNet, Hulu and Weather Channel carriage talk info with Charter and Cox, DOJ says

Justice statue with sword and scales

Detailing its anti-trust case against AT&T and DirecTV over carriage of regional sports network TWC SportsNet LA, the U.S. Justice Department said DirecTV Chief Content Officer Dan York and his team illegally shared information about the satellite operator’s negotiations for the channel with executives at rival pay-TV services Charter Communications and Cox Communications. 

The DOJ said it’s presenting phone calls, text messages and emails – as well as testimony from Charter and Cox executives – as evidence that York colluded with Charter and Cox executives in 2014 to resist making a carriage deal with Time Warner Cable to carry the channel. SportsNet LA is the exclusive local TV home of Major League Baseball’s Los Angeles Dodgers. 

AT&T released a statement Wednesday, indicating the matter dates back to before it acquired DirecTV. Charter had no comment for FierceCable, but a Cox representative said, “We are gratified that we were not named as a defendant. We continue to be committed to making independent decisions on program content," in an email to FierceCable.

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The DOJ’s suit has been obtained and reported on in the Los Angeles Times

RELATED: AT&T responds to DOJ’s SportsNet LA suit: Carriage issues ‘occurred before we bought DirecTV'

The action the DOJ is concerned with dates back to early 2014, prior to AT&T’s purchase of DirecTV and Charter’s acquisition of TWC. At the time, AT&T U-verse was a rival pay-TV service. 

Citing one specific instance, the DOJ said that in March 2014, DirecTV executives had a 12-minute phone call with their top-level AT&T counterparts, advising the telco not to sign a carriage deal for SportsNet LA for AT&T U-verse. 

Prosecutors said that a U-verse executive sent a text message to York later that month advising him on TWC’s carriage fee offer and asking if it was in line with what DirecTV had been offered. 

The DOJ, meanwhile, said the collision extended beyond SportsNet LA, with Charter and DirecTV execs exchanging info about negotiations for assets including the Weather Channel and Hulu, for instance.

The nexus of DirecTV’s strategy, DOJ contends, dates back to its negotiations for another TWC regional sports network, SportsNet, home of the NBA’s Los Angeles Lakers.

The Justice Department said that DirecTV felt burned after it initially resisted carriage of the channel, only to watch TWC put pressure on the region’s No. 2 pay-TV operator by signing low-ball deals with Cox, Charter and U-verse. DirecTV, DOJ said, ended up paying 50 percent more for the Lakers RSN than it originally projected at a time when the NBA team went from championship caliber to lottery-bound rebuilding mode.

The DOJ blessed the TWC strategy as being a legal “divide and conquer” technique. 

In 2013, TWC signed a 25-year, $8.35 billion deal to acquire exclusive local broadcast rights to the Dodgers. DirecTV, however, embarked on a very different strategy to resist TWC’s price pressure. 

After three Major League Baseball seasons – including the just-completed 2016 campaign that featured the retirement of legendary play-by-play man Vin Scully – TWC SportsNet LA is still unavailable in half of Southern California pay-TV homes. 

The DOJ has filed its suit as AT&T seeks to follow up its 2015 acquisition of DirecTV with the $85.4 billion purchase of Time Warner Inc., so the federal agency certainly has a lot of leverage. 

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