Sides settle contract dispute that spurred blackout early Sunday
After nearly four days at war, DirecTV and Tribune reached a five-year deal Wednesday night that restored Tribune’s 23 TV stations to the satcaster’s lineup.
The stations reaching about 5 million DirecTV subscribers went dark early Sunday after the sides could not come to terms on a new retransmission consent agreement. The new pact also covers cabler WGN America, which had been a sticking point in the negotiations. The talks broke down over the weekend as the March 31 expiration of the previous contract approached (Daily Variety, April 2).
The specifics of the deal were not immediately clear, though it is believed that both sides made concessions in the interest of getting the stations back on the bird. The pact is worth many millions to Tribune Co., as DirecTV for the first time has agreed to pay cash compensation on a per-subscriber basis for the stations, most in top markets including New York, L.A., Chicago, Philadelphia and Dallas.
Tribune’s outlets encompass 15 CW affils, seven Fox affils and the ABC outlet in New Orleans. Tribune’s new deal is part of the industrywide push by broadcasters to garner significant subscriber fees from multichannel video providers, commensurate with the coin operators pay for cable channels that in many cases deliver far smaller audiences.
DirecTV had been critical of Tribune management in its public statements regarding the shutdown, and that sentiment continued even as it confirmed the resumption of service. DirecTV asserted that Tribune’s long-running bankruptcy proceedings were influencing what the satcaster characterized as an effort to extract higher rates than Tribune had garnered from other cable and satellite operators.
“We’re pleased that Tribune and their creditors now recognize that all DirecTV wanted from day one was to pay fair market rates for their channels,” said Derek Chang, DirecTV’s exec veep of content, strategy and development. “It’s unfortunate that Tribune was willing to hold our customers hostage in an attempt to extract excessive rates, but in the end we reached a fair deal at market rates similar to what we originally agreed to on March 29.”
DirecTV’s news release concluded with a plea for the feds to revamp the 20-year-old retransmission consent rule that mandates negotiations between broadcasters and multichannel video providers to retransmit local station signals. DirecTV filed a complaint against Tribune with the FCC on Monday.
“Five million American homes blacked out from their local broadcaster cries out for an examination in Washington, D.C of the decades-old telecom law that encourages these impasses,” the release stated.
Tribune struck a more conciliatory tone in announcing the deal. However, the station group was the first to take the dispute public early last week when it began warning viewers with on-air messages of a possible shutdown and urging them to call or email DirecTV in protest.
“We are extremely pleased to have reached an agreement with DirecTV and to return our valuable news, entertainment and sports programming to DirecTV subscribers,” said Tribune Broadcasting prexy Nils Larsen. “I want to thank viewers across all of our markets for their support, understanding and patience during the negotiating process — we truly regret the service interruptions of the last several days.”