Cox Media on Tuesday pulled around two dozen local stations from AT&T-owned pay television platforms, including satellite service DirecTV and Internet-based service AT&T TV.
In a message to viewers, Cox Media said the decision to pull its stations from DirecTV and AT&T TV came after AT&T refused to pay more money for the channels.
“AT&T [and] DirecTV refused to agree to a fair agreement without our owner, Cox Media Group,” a message on one local TV station’s website read.
Last week, The Desk reported Cox Media had begun notifying viewers of an impending blackout, noting that some local TV station websites contained misinformation, including an assertion that Cox Media and AT&T were “forced by law” to negotiate carriage agreements.
Those agreements are in lieu of a broadcaster’s option to cede re-transmission revenue in exchange for a cable or satellite company’s obligation to carry its signal, a rule known as “must carry.” The rule applies equally to cable and satellite companies with respect to licensed, over-the-air broadcast stations.
But most corporate owners of local broadcast stations choose not to impose “must carry” restrictions because, under the law, they lose the right to seek compensation in exchange for a provider’s right to re-distribute their signals. Instead, companies like Cox Media choose to ask cable and satellite companies for financial compensation through a carriage or re-transmission deal.
In recent years, local station owners like Cox Media have demanded more money from distributors like AT&T in exchange for their signals. AT&T and other companies have started resisting those efforts, complaining that the higher costs are passed on to customers in the form of higher bills.
Analysts say the margins between what a programmer like Cox Media requests and what a distributor like AT&T ultimately pays has greatly reduced cable and satellite profits over the years. Deals that are eventually reached do typically lead to higher bills for customers, which has accelerated a trend known as “cord-cutting,” the ditching of expensive cable and satellite packages for cheaper, Internet-based offerings.
Programmers like Cox Media say they’re not the bad guys: They note that live events like local news and sports cost more money each year to provide while scripted series and reality shows are increasingly moving to cable and streaming services, which cut into their ability to sell ads.
AT&T has not released a statement on the Cox Media situation as of early Tuesday morning, but Cox Media says most customers within its local station footprints won’t be affected by the dispute because they typically obtain their signals through other means, including over-the-air.