Almost three years into its launch, YouTube TV announced its first-ever anticipated carriage dispute, legitimizing it among legacy pay television companies in a way that is likely to frustrated sports fans in a number of markets across the country.
On Thursday, the Google-owned company announced it has so far been unable to extend a contract with Sinclair Broadcasting Network to continue carrying nearly two dozen Fox Sports-branded regional networks and would likely have to drop those channels on Saturday if an agreement can’t be reached.
“We purchase rights from Sinclair to distribute content to you,” YouTube TV said in a statement. “Despite our best efforts, we’ve been unable to reach an agreement with Sinclair.”
The issue also affects the YES Network, a channel partially owned by Sinclair. It does not affect national sports networks Fox Sports 1 and Fox Sports 2, which are both owned by Fox Corporation, nor does it affect local broadcast affiliates owned by Sinclair, because those channels are covered under separate agreements.
Speaking on background, a source familiar with the negotiations said Sinclair asked YouTube TV for a slight increase in carriage fees and an agreement to carry the new Marquee Sports Network in exchange for the right to redistribute the regional sports networks on its platform.
YouTube TV and Sinclair have not commented publicly on why an agreement has not been reached.
The announcement came one day before YouTube TV was expected to celebrate its third birthday. Launched on February 28, 2017, the service has invested heavily in reaching agreements with programmers and increasing its channel offerings.
At launch, it offered around 45 channels for $35 a month. Today, it offers over 70 channels for $50 a month, with around one-quarter of its lineup being national, regional and niche sports networks.
Over the last few months, the Google-backed streaming TV service has worked aggressively to forge partnerships with existing Internet service providers, offering YouTube TV as a supplemental service to their customers who are moving away from traditional cable and satellite packages in large numbers due to increasing costs. Many of those costs, distributors say, are due to rising fees imposed by companies who own sports networks.
YouTube TV is the second pay TV company in recent months to drop regional sports networks owned by Sinclair. Last year, Dish Network pulled the same package of channels from its satellite platform and Internet-based streaming service Sling TV.
Last week, Dish Network co-founder and chairman Charlie Ergen told investors on a conference call that the channels were not likely to return to Dish anytime soon due to the rising costs associated with carrying them. Since dropping the channels, Ergen said most people who wanted them have left Dish and Sling for other services, and it didn’t make sense to reach a new deal with Sinclair if it meant forcing current customers to pay for channels they don’t want.
“The programmers have a hard time understanding that, once somebody leaves [Dish], there’s no reason to put something back and tax the rest of the [customers] because the people who really watch the channel leave us because they have alternatives,” Ergen said.
