Companies fail to make new carriage agreement

Big retrans battle may be the last | EARLIER: DirecTV, Tribune battle heats up

Tribune Broadcasting stations in 19 markets went dark on DirecTV early Sunday after the broadcaster and satcaster failed to reach a new carriage agreement following days of negotiations and heated sniping on Saturday.

Tribune said Saturday night it had no choice but to pull its signals as federal law requires a contract to be in place for a multichannel video provider to retransmit local stations. DirecTV asserted that it was Tribune’s call to go dark — as broadcasters often do in protracted retrans negotiations.

“This situation is extremely unfortunate,” said Nils Larsen, Tribune Broadcasting president. “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.”

A DirecTV spokesman said of the shutdown: “It’s the last thing we want to do but we have no choice.” He said DirecTV was committed to continuing to work toward an agreement to avoid as much disruption as possible.

The sparring between the sides of retransmission consent fees became heightened Saturday as the sides disputed whether a “handshake” deal had been reached on Thursday, as DirecTV claimed. The shutdown affects 23 Tribune stations — mostly CW and Fox affils — in such major markets as New York, Los Angeles, Chicago and Philadelphia. It also affects Tribune’s ABC affil in New Orleans.

The blackout is the latest flareup of tensions between broadcasters and cable/satellite operators over retransmission consent deals. Broadcasters have become aggressive in the past few years in seeking cash compensation from operators commensurate with the fees operators pay to other cablers with far smaller comparative auds.

DirecTV had not previously paid Tribune cash for retrans rights. According to sources, the sides had closed much of the price gap on the per-subscriber fee DirecTV would pay for the stations, but a big sticking point was Tribune’s push for fees for its WGN America cabler. WGN America had been historically been covered under Tribune’s station contracts. Tribune has beefed up the channel’s programming and branding in the past two years and is now seeking higher carriage fees from operators.

Earlier Saturday, DirecTV announced that the sides had a handshake deal for the stations, but that brought a quick denial from Tribune. DirecTV responded with a sharply worded statement accusing Tribune of negotiating in “bad faith.” It also asserted that Tribune was more concerned with satisfying creditors as part of its long-running bankruptcy proceedings than it was in protecting viewers’ access to its stations.

DirecTV’s claim of “bad faith” may have been designed to get the attention of FCC officials. Such a claim can be a basis for filing a complaint against a company with the FCC in relation to a retrans impasse. The FCC took a look at the nearly 20-year-old retrans law last year, after lobbying from cablers that broadcasters were using blackouts as leverage to demand high fees. The FCC ultimately decided it didn’t have much authority to change the law, and thus it has stayed mostly on the sidelines of the retrans wars.

The DirecTV-Tribune shutdown marks the highest-profile major-market service disruption related to retrans since Fox’s New York stations went dark on Cablevision’s system for more than two weeks in October 2010.

DirecTV said it would put a message slate about the dispute in the slots where Tribune stations and WGN America are located.

Tribune is sure to continue its public push to urge viewers to contact DirecTV and protest the shutdown. Tribune noted that viewers in New York, Chi and Philadelphia will lose access to local baseball coverage just as the season begins next week.

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