AT&T pledges ‘baseball-style’ arbitration for fee disputes involving CNN, TNT and other Turner networks

AT&T Chairman and CEO Randall Stephenson

AT&T told a federal judge that it has pledged to rival pay TV operators that it will submit to “baseball-style” arbitration for future fee disputes involving CNN, TNT, Cartoon Networks and other Turner networks should AT&T acquire Turner parent Time Warner Inc.

AT&T is currently battling the Justice Department in court, alleging that the government agency is capriciously and arbitrarily blocking its $85 billion proposal to buy Time Warner. 

In attempting to downplay speculation that its rejection of the deal is really based on President Donald Trump’s ongoing beef with CNN, the DOJ has cited fears that AT&T will use its leverage to demand higher fees from rival pay-TV operators.

But AT&T has made what appears to be a major concession. Amid the flurry of negotiation impasses between programmers and pay TV operators that have devolved into blackouts in recent years, operators have often suggested that both sides submit to binding third-party arbitration. Programmers almost always choose to pull their programming off the operator's program guide rather than submit to an arbitration process within which they have no control over the final outcome. 

AT&T, which operates U-verse and DirecTV, has agreed to submit to this practice for seven years, meaning every time it goes to the mat with Dish Network, Comcast, Charter or any other rival operator, arbitration will be on the table. 

As noted by Recode, the Justice Department approved Comcast’s purchase of another major media conglomerate, NBCUniversal, in 2011 when Comcast made a similar concession. 

AT&T is contending that the DOJ has made “an abrupt departure from precedent” in blocking its quest for Time Warner.