Following through on its earlier threat, Tribune Broadcasting pulled television stations from DirecTV (Nasdaq: DTV) in 19 markets on Sunday. The stations include local broadcast networks as well as Tribune's national cable network, WGN America. Tribune maintains that DirecTV has been inflexible in licensing negotiations, with the satellite provider specifically refusing to pay retransmission fees for local broadcast content. The network blackouts mean DirecTV subscribers in markets including Chicago, Philadelphia Washington, D.C. are not be able to view Tribune-owned affiliate stations over the satellite service. This could result in baseball fans missing that sport's opening day later this week.
Nils Larsen, president of Tribune Broadcasting noted in a statement, "This situation is extremely unfortunate. We don't want anyone to lose the valuable programming we provide, but we simply cannot get fair compensation from DirecTV, and we cannot allow DirecTV to continue taking advantage of us."
DirecTV countered with its own statement:
"We're extremely perplexed as Tribune management and DIRECTV had a handshake deal on Thursday with an agreed upon rate for their channels. Their actions are the true definition of "bad faith" in every sense of the term."
The provider added, "We can't help but wonder whether Tribune's ability to negotiate a reasonable retransmission agreement with DirecTV is being undermined by the complexities and competing interests in their lengthy bankruptcy process. Despite our best efforts to compensate Tribune fairly for both WGN America and the local stations, it seems they are focused on unduly benefitting their creditors rather than viewers. Threatening station blackouts to extract an exorbitant fee for all of Tribune's content may provide an improved return for certain banks and hedge funds, but is not in the interest of its viewers and is not a cure for bankruptcy."
Increasingly, retransmission fees are an important part of the revenue equation for broadcast networks. SNL Kagan reported in February that per-subscriber fees for broadcast stations rose as high as 61 cents in the third quarter of 2011. As a result, retransmission fights are getting a lot nastier, and unless and until the FCC steps in, expect more content blackouts on the horizon.
- the Chicago Tribune has this article
- see Tribune's release
- and DirecTV's statement
- SNL Kagan has this report
DirecTV, Tribune square off over retransmission fees
Major league TV rights battle next after Dodgers sale
NAB's Smith on retrans: 'We feel like we're owed something'
ACA complains about 'broadcaster collusion' in retransmission consent deals