DirecTV rips Sinclair for 'unnecessary threats' in retrans dispute
DirecTV (Nasdaq: DTV) accused Sinclair Broadcast Group of attempting to "frighten" subscribers in 47 markets with its threat to pull 87 stations that carry programming from Fox, ABC, CBS, NBC and other networks unless it agrees to pay increased retransmission-consent fees.
The station group owner, which fought a similar public battle with Dish Network (Nasdaq: DISH) last August, began warning DirecTV subscribers over the weekend that they may lose programming unless it agrees to a new deal before its contract expires on Feb. 28. "Although DirecTV and Sinclair have been negotiating for quite some time in an effort to reach a new agreement, at this time it does not appear that these efforts will be successful," Sinclair said in a statement posted on the websites of stations it owns in Las Vegas, Baltimore, Tampa, Fla., Syracuse, N.Y., and other markets.
DirecTV has taken a harder negotiation stance with content suppliers in recent years as it looks to avoid passing the costs for increased programming on to subscribers. While it has waged several battles with station group owners and cable networks, it's unusual for programmers to follow through on threats to black out DirecTV's 22 million subscribers. Sinclair has an incentive to reach an agreement with DirecTV since the ratings and ad revenue its local TV stations generate would take a hit if it were to lose DirecTV distribution.
Last August, DirecTV rival Dish Network complained that Sinclair was demanding "massive" increases in retransmission-consent fees. After a two-week dispute, the companies agreed to a deal.
DirecTV noted in a statement that Sinclair has threatened to pull its stations in recent years from several other pay TV distributors that it later signed to new contracts while avoiding blackouts, including Comcast (Nasdaq: CMCSA), Suddenlink, Bright House Networks, Time Warner Cable (NYSE: TWC) and Charter Communications (Nasdaq: CHTR).
"We're engaged in productive discussions with Sinclair Broadcast Group to retain their local stations in the DirecTV lineup. Our customers can be assured that neither DirecTV nor Sinclair has any intention of allowing the disruption of their local stations," DirecTV said in the statement. "These are the same unnecessary threats, posing as warnings, that Sinclair has made to frighten customers of other pay TV providers," the company added.
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