Dish, Sinclair Extend Contract Talks, Avert Massive Retrans Blackout

Dish Network and Sinclair Broadcast Group execs negotiated into the early hours of Sunday, averting a blackout that would have taken network affiliate stations off of the satellite TV provider in 79 markets spread across the country.

Dish and Sinclair had been facing a midnight Eastern deadline on Saturday for the expiration of the previous contract. In a statement issued at 3:30 a.m. ET, Dish said the sides had agreed to a short-term extension in order to avoid the shutdown.

Dish on Saturday filed a complaint with the FCC accusing Sinclair of violating the good-faith covenants of the FCC’s retransmission consent rules. In the statement, Dish said it had asked the FCC to pause action on that complaint while talks continued.

The possibility of a Dish-Sinclair shutdown drew the attention of the TV biz and regulators in Washington because it would be the largest ever retrans brawl in in terms of sheer number of stations affected, covering 153 outlets in 79 markets. Dish Network has about 14 million subscribers.

Baltimore-based Sinclair’s holdings are widespread across the country, sprinkled through every region from Portland, Ore. to Nashville, Tenn. to Milwaukee, Wis. to the company’s home base in Baltimore. Washington, D.C. is Sinclair’s largest market, the nation’s eighth-largest, where it owns ABC affiliate WJLA-TV. In most of its markets, Sinclair owns at least two stations.

Dish’s FCC complaint claims that Sinclair has breached the good-faith convenent, and that the broadcaster is in violation of FCC rules in attempting to negotiate new retrans deals for 32 stations that it does not own. Sinclair has management agreements with those stations, which are commonplace for local stations. But Dish is asserting that Sinclair has no right to negotiate on behalf of those stations because it does not own at least 51% of any of those stations, per FCC rules, according to Dish.

Sinclair is “seeking to intentionally harm and exploit millions of innocent consumers to gain negotiating leverage,” according to complaint. Sinclair execs could not immediately be reached for comment late Saturday night.

According to the complaint, Dish reached out to Sinclair on June 9 to begin negotiating a new three-year retrans agreement. Sinclair responded one month later. As the sides made progress, according to the complaint, Dish asked Sinclair to sign a short-term extension to allow the talks to continue without an interruption in service but Sinclair refused.

Dish’s complaint further states that an unnamed Sinclair exec threatened to put all negotiations on ice for a full year if Dish did not reach a retrans deal by the Aug. 15 deadline. There was no immediate word on Saturday from the FCC regarding the complaint.

A Sinclair-Dish blackout would be the most headline-grabbing retrans scuffle since CBS went dark for a month on Time Warner Cable systems in July and August of 2013. CBS and Dish also had a shutdown in December but it lasted less than 12 hours.

The FCC has already said it intends to review the rules regarding retransmission consent at a time when blackouts are becoming more frequent between broadcast TV stations and MVPDs, which are required by law to carry broadcast TV stations.

 

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