Satellite television provider DirecTV accused Irving’s Nexstar Broadcasting Group, the nation’s largest operator of local TV channels, of fixing prices with competitors White Knight and Mission, causing transmission fees to spike and forcing providers to raise bills for customers.
DirecTV, which is majority owned by Dallas-based AT&T Inc., filed a lawsuit Tuesday in a U.S. District Court in New York, saying the three companies worked together to “manipulate, raise and fix” retransmission consent fees in markets where they all own local affiliates for ABC, CBS, NBC and FOX.
TV providers and station operators across the country have been tangling over broadcast fees as the landscape of the entertainment industry has changed. Streaming services have added competition and regional sports networks are paying bigger sums to air the last bastion of traditional cable and satellite services, live sports. Broadcast networks such as ABC, NBC, FOX and CBS are also key players, not only because they air local television news and network shows, but because they offer live sports on the weekends such as college football and the NFL.
DirecTV claims that the coordinated efforts have already led to the blackout of 27 local TV stations in 25 markets for satellite customers including markets in Texas, such as Amarillo, Tyler and Lubbock.
That has led to thousands of customers losing out on major sporting events and popular national events from the World Series and Super Bowl to the Academy Awards and the Grammys.
“Mission and White Knight are now unlawfully coordinating with Nexstar to raise prices and extract supracompetitive retransmission consent fees from DIRECTV in ‘overlap’ DMAs—those markets where both Nexstar and either Mission or White Knight each own a Big-4 station,” DirecTV said in a statement. “To accomplish this unlawful and anticompetitive aim, Mission and White Knight have entered into an agreement in which they have effectively relinquished decision-making authority to Nexstar.”
In October when the two sides were attempting to negotiate a new deal, Mission said that it was facing increased costs to broadcast its networks.
“We pay our network partners millions of dollars for entertainment programming and live sports,” Mission Broadcasting president Dennis Thatcher president said in a statement. “The cost to do these things has, understandably, gone up significantly — especially live sports rights — and these costs are passed along to us, the station owner.”
Nexstar said the lawsuit was “without merit,” according to a spokesman for the company.
“Nexstar’s shared services agreements with White Knight and Mission Broadcasting are in full compliance with FCC rules, and each station group independently negotiates its own retransmission consent agreements with its cable, satellite, and telco partners,” a company spokesman said in a statement. “This lawsuit is without merit and Nexstar looks forward to prevailing in court.”
Nexstar is the largest broadcaster in the country and growing, owning more than 200 local stations in 115 markets. Nexstar also bought a 75% stake in The CW Network from Warner Bros. Discovery and Paramount last year.
AT&T owns a 70% stake in DirecTV, which is based in El Segundo, Calif., after spinning it off in 2021.
DirecTV is no stranger to blackout disputes with the stations it partners with. In 2020, AT&T and DirecTV fought with station operator TEGNA, which led to the blackout of dozens of local stations for customers, including ABC’s affiliate in the Dallas area, WFAA.
