In yet another instance of retransmission consent negotiations turning ugly, Tribune Co. has yanked its signals from DirecTV.
Among the more prominent Tribune channels being denied to DirecTV are WGN in Chicago, WPIX in New York City, KTLA in Los Angeles and WDCW in Washington, D.C. The blackout is estimated to affect a total of 30 million viewers in 19 markets across the country.
Three months ago, Cordillera Communications pulled its signals from Time Warner Cable in a pair of markets in Texas. And those are only two of the more prominent blackouts this year.
Once something to be avoided at all costs, broadcasters are now commonly using the technique. There were more than 40 blackouts last year, and so far in 2012, broadcasters are on pace to match that number, according to the American Television Alliance (ATVA).
The substance of retrans negotiations is almost kept secret, so there is no independent means of evaluating what either party says.
Of course, both Tribune and DirecTV are accusing each other of intransigence, but DirecTV is clearly more frustrated by the turn of events.
Before the weekend, DirecTV was confident it had come to a last-minute handshake deal with Tribune to keep Tribune’s channels on the air, and it told its subscribers so.
Tribune quickly stepped on that with a statement to the contrary: “Tribune Broadcasting has not reached an agreement or come to terms with DirecTV on any aspect of its contract, which expires at midnight tonight. Any statement by DirecTV to the contrary is inaccurate and misleading."
DirecTV fired back, accusing Tribune of acting in bad faith and responding: "We can't help but wonder whether Tribune's ability to negotiate a reasonable retransmission agreement with DirecTV is being undermined by the complexities and competing interests in their lengthy bankruptcy process. Despite our best efforts to compensate Tribune fairly for both WGN America and the local stations, it seems they are focused on unduly benefiting their creditors rather than viewers. Threatening station blackouts to extract an exorbitant fee for all of Tribune's content may provide an improved return for certain banks and hedge funds but is not in the interest of its viewers and is not a cure for bankruptcy."
Smaller cable operators have been complaining about being squeezed by broadcasters for years. Once upon a time, they might have played one affiliate against another, but that option is increasingly being cut off as multiple affiliates of each broadcast network insist on conducting joint negotiations.
American Cable Association (ACA) President and CEO Matthew Polka took the occasion of the Tribune-DirecTV fight to once again bang the drum for Congress and the FCC to do something about the increasingly divisive retrans consent situation, which Polka characterized as “blackmail or blackout.”
“Tribune Broadcasting’s decision to black out millions of DirecTV customers in 19 markets across the country supports ACA’s view expressed many times before Congress and the Federal Communications Commission that current retransmission consent rules need to be modernized because they no longer serve the public interest,” he said. “The rules are outdated because they have failed to keep pace with the dynamic change in the delivery of video programming by cable, satellite and Internet-based distribution platforms that has occurred in the 20 years since the rules were first enacted by Congress.”
The ATVA said of broadcasters: “They continue to take advantage of government-mandated rules that give them the upper hand and stifle the free market. Until the FCC or Congress act, broadcasters will keep on holding viewers hostage to gain leverage in business negotiations.”