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Nexstar demands higher fees from DirecTV, threatens channel blackout

More than 160 local stations could be dropped from DirecTV and AT&T U-Verse by the weekend if a new deal is not hammered out.

More than 160 local stations could be dropped from DirecTV and AT&T U-Verse by the weekend if a new deal is not hammered out.

A DirecTV satellite installation van in Ypsilanti Township, Michigan. (Photo by Dwight Burdette via Wikimedia Commons, Graphic by The Desk)

More than 160 local television stations owned or controlled by Nexstar Media Group could be dropped from DirecTV and AT&T U-Verse by the end of the week, as a contractual agreement between the companies is set to expire.

On Thursday, Nexstar began warning viewers on-air and via station websites that it has tried to reach a new deal with DirecTV and AT&T U-Verse over continued carriage of its channels.

The messaging made it apparent that Nexstar was negotiating a new fee structure in exchange for the right to carry its ABC, NBC, CBS, Fox and CW stations on DirecTV and AT&T U-Verse. In an email to The Desk, a DirecTV spokesperson affirmed the same.

“Nexstar, the nation’s largest broadcaster, is demanding to more than double the amount it charges our customers to access approximately 200 local stations it owns or controls in more than 100 metro areas…,” the spokesperson said. “Unfortunately, Nexstar has a long track record of demanding significantly higher fees from all pay TV operators and often forces providers to stop carrying their channels during negotiations. DIRECTV will take the necessary actions to provide our customers access to their favorite programming while protecting them from unwarranted price increases.”

Nexstar is the largest owner of local television stations in the country. It also negotiates retransmission consent on behalf of dozens of stations licensed to Mission Broadcasting and White Knight Broadcasting.

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In March, DirecTV sued Nexstar over its partnership with Mission and White Knight, alleging White Knight and Mission were mere proxies that allowed Nexstar to flout federal ownership rules. Those rules state that any one single company cannot own broadcast stations reaching more than 38 percent of the country. DirecTV alleges the partnership helps Nexstar increase its reach to nearly 70 percent, putting it over the legal limit.

At the time, a Nexstar spokesperson said its partnerships with White Knight and Mission fully complied with FCC rules. But the forthcoming carriage dispute between Nexstar and DirecTV appears to show that the satellite broadcaster’s claims have some merit.

On Thursday, the website of WPIX-TV (Channel 11), a New York-area CW affiliate, posted a banner warning that its station might be removed from DirecTV and AT&T U-Verse. The banner contained a link to a website called “Keep My Local Station,” and a copyright notice at the bottom of the website affirmed it is owned by Nexstar. WPIX is owned by Mission.

This week, DirecTV escalated its battle with Nexstar over retransmission fees and its operational control of Mission and White Knight’s stations, filing an informal objection with the Federal Communications Commission (FCC) over the partnership.

The complaint largely outlined DirecTV’s viewpoint as stated in its antitrust lawsuit filed in March, though it incorporated additional information about the pending carriage dispute between the two sides.

“The entire industry views Mission’s and White Knight’s stations as controlled by Nexstar,” the complaint reads, according to a copy obtained by The Desk. “Indeed, the industry has coined a term for this setup—Mission and White Knight’s stations are Nexstar’s sidecars. The term suggests that Nexstar, rather than Mission, does the driving. In this case, it is the truth.”

The complaint also notes that some of DirecTV’s competitors, including Comcast and Dish Network, have found themselves on the unfortunate end of Nexstar’s negotiating tactics with respect to the Mission and White Knight stations. Dish customers have been without dozens of Nexstar-operated stations since January; Comcast filed a complaint with the FCC over Nexstar’s control of WPIX late last year.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).