Nexstar, DirecTV Reach Retrans Agreement, End 76-Day Blackout
Nexstar and DirecTV signed a deal on retransmission rights for 176 Nexstar stations, ending a 76-day blackout for those stations but leaving behind an open FCC complaint, an ongoing antirust court battle and a continuing blackout for 27 other stations owned by Mission Broadcasting and White Knight Broadcasting but operated by Nexstar through shared service agreements. DirecTV and Nexstar announced “a comprehensive new multi-year distribution agreement” in a joint release Monday, a day after announcing the return of Nexstar’s programming to DirecTV, DirecTV Stream and U-Verse. Terms of the agreements weren't disclosed.
“Unfortunately, over the past decade-plus access to your programming has become a battleground for networks and stations to try to drive up higher rates,” said DirecTV CEO Bill Morrow in a statement to viewers on DirecTV’s retrans battle website TV Promise. In a release, DirecTV lamented that the blackout will continue for Mission’s stations. “They have been unavailable on satellite, streaming and IPTV services since mid-October of last year, despite our ongoing federal anti-trust suit and FCC complaints,” said DirecTV. “We continue to seek every avenue to bring them back too.” Mission’s stations have been blacked out on Dish Network since January. “I can tell you that we do not own the Mission or White Knight stations that have been blacked out by Dish and DTV for months, and we do not negotiate their retrans or carriage agreements,” emailed a Nexstar spokesperson. Mission didn’t comment.
The Nexstar and DirecTV retrans fight was notable for the number of stations involved and the size of the players, and for being conducted across multiple FCC proceedings and courtrooms. In addition to DirecTV’s antitrust lawsuit in U.S. District Court for Southern New York over Nexstar’s relationship with Mission and litigation before the New York Supreme Court, the MVPD filed an informal complaint at the FCC (see 2306300015) and raised the issue in the FCC’s docket on reclassifying virtual MVPDs (see 2307210063). In the antitrust case, the companies are waiting for a ruling from the court on Nexstar’s request for the case to be dismissed (see 2307140034). Broadcast attorneys said the Mission complaint and court cases could be resolved once the company’s retrans disputes are. Comcast and Charter settled court disputes with Nexstar immediately after reaching retransmission contracts with the broadcaster (see 2303150041)
Despite its length and breadth, the Nexstar/DirecTV dispute didn’t draw as much attention from lawmakers or the FCC as some past carriage disputes because of the timing and the markets involved, attorneys said. MVPDs structure their retrans contracts to end in the summer when viewership is lower and high-value content such as NFL games aren’t happening, said Pillsbury broadcast attorney Scott Flick. The beginning of the NFL season is considered a primary force in the two sides reaching an agreement, and the companies announced the end of the blackout on Sunday in time to air NFL games. “It is probably no accident this gets resolved just as football comes on,” Flick said.
With the FCC expected to soon take up long-delayed quadrennial reviews of broadcast ownership rules (see 2308160064), DirecTV’s attacks on Nexstar’s relationship with Mission could affect regulatory policy, said Ross Lieberman, formerly of ACA Connects and now senior vice president-government affairs at Hotwire. In 2014, the FCC under then-Chairman Tom Wheeler acted to restrict shared sales agreements, but those policies were largely unwound by his successor, Ajit Pai. MVPDs' advocacy for keeping restrictive broadcast ownership rules is an extension of their retrans negotiation tactics, a broadcast attorney said.
Meanwhile, reported talks between Nexstar and Disney about the broadcaster buying ABC could come to nothing, as Nexstar is “a disciplined buyer,” Deutsche Bank analysts wrote investors Monday. An ABC sale would mean less Disney exposure to a declining linear TV business, but ABC seems more stable than ESPN and other Disney cable networks and benefits from free over-the-air distribution and from news programming, they said. An ABC deal would make Nexstar less beholden to third-party network affiliations that are increasingly also competition via streaming, they said. But most of ABC’s profit generation is likely at the stations, and an ABC deal would require a notable number of station divestitures since Disney’s ABC stations have a big overlap with Nexstar’s existing footprint, they said. They said they could imagine an agreement that has Disney keeping the ad revenue for broadcast sports events but also bear all the costs of sports programming, with Nexstar paying a fee to Disney since sports would bolster Nexstar’s retrans pricing power.