Satcaster cries 'bad faith' as sides spar over retrans pact

Tribune stations go dark on DirecTV

The war of words between DirecTV and Tribune exploded Saturday as the sides sparred over the status of negotiations to avoid a blackout of CW, Fox and ABC affiliate stations in 16 markets.

A midnight deadline looms for the sides to reach a new carriage agreement covering Tribune’s 23 TV stations and cabler WGN America.

The sparring heated up early in the day after DirecTV issued a statement indicating that it had come to terms with Tribune on a deal for its 23 stations — which Tribune denied.

That denial prompted DirecTV to issue another sharply worded statement referencing Tribune’s protracted bankruptcy proceedings and whether it was influencing the negotiations. DirecTV insisted that the sides had reached a “handshake deal” for the stations on Thursday night, well before its statement was issued on Saturday.

“Their actions are the true definition of ‘bad faith’ in every sense of the term,” DirecTV said. “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.”

DirecTV’s initial statement was more benign.

“We accept the rate proposal Tribune set forth on Thursday for the local channels and look forward to completing this agreement,” said Dan Hartman, DirecTV’s senior vice president of programming.

An hour later, Tribune issued its denial:

“Tribune Broadcasting has not reached an agreement or come to terms with DirecTV on any aspect of its contract, which expires at midnight tonight. Any statement by DirecTV to the contrary is inaccurate and misleading.”

Tribune issued a second statement reiterating its assertion that there was no such handshake agreement on Thursday. And Tribune emphasized that by law the stations cannot be carried if the sides do not have a formal agreement.

The sides have been wrangling for months over a new retransmission consent agreement covering Tribune-owned stations and WGN America to replace a contract that expires at midnight tonight. As indicated by the dueling statements, the sides are said to be significantly apart on the fees that Tribune seeks in exchange for allowing the satcaster to retransmit its station signals in markets including New York, Los Angeles, Chicago, Philadelphia, Dallas and Washington, D.C.

Execs from the two companies had a face-to-face session in New York on Thursday, and the sides kept in close contact by telephone on Friday. Communication continued by phone and email on Saturday, amid the public tussling.

Tribune went public on Monday with its assertion that DirecTV was balking at what Tribune deemed a “fair” price for retrans rights to its 23 stations. Since then, Tribune outlets have run crawls and PSAs warning viewers that a interruption in service on DirecTV’s lineup may be in the offing. The Tribune-owned Los Angeles Times has carried full page ads for the past few days urging viewers to “save KTLA” by calling or emailing DirecTV reps.

The dispute marks the latest flareup of tensions between a broadcaster and a multichannel video provider over retrans rights. Tribune has in the past received no cash compensation from DirecTV for its stations, but it and other station groups have pushed hard in the past few years to earn fees commensurate with the prices that operators pay for many cable channels that draw far smaller audiences. With CW affils in most of its largest markets, however, Tribune does not bring as much leverage to the table as stations affiliated with the Big Four, although it own seven Fox affils in markets including Indianapolis, Seattle and San Diego, as well as the ABC affil in New Orleans.

Tribune stations do have the home-field advantage of carrying key sports teams in local markets. On the verge of the start of baseball season, Tribune has been emphasizing that viewers in New York would miss New York Mets games on WPIX-TV and Philadelphia-area viewers would miss Phillies games on WPHL-TV.

Tribune is also seeking cash fees for its WGN America cabler, which it has enhanced during the past few years with contempo off-net comedies and a big rebranding campaign. It’s understood that WGN America fees have been a sticking point in the talks.

DirecTV maintains that it will not yank the stations unless forced to do so by Tribune. Although sources close the situation said a shutdown was seeming more likely, the sides could agree to a short-term extension to avoid disruption if the talks progress.

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