DirectTV and Cowles have reached an impasse in their retransmission consent negotiations, resulting on DirecTV dropping Cowles’ NBC affiliate KHQ Spokane and its satellites serviving Yahima and Richland and four Montana stations — NBC affiliate KULR Billings, ABC affiliate KWYB Butte, ABC affiliate KFBB Great Falls and ABC affiilate KTMF Missoula, according to the stations’ websites. Their last retrans agreement expired in June.
The Modern Television Act of 2019, introduced by Reps. Anna Eshoo (D-Calif.) and Steve Scalise (R-La.), addresses “perennial broadcast TV blackouts” caused by failed retrans negotiations. It contains familiar asks from the pair, including regulation of blackouts and providing for outside arbitration of negotiation impasses. Elements of the legislation could find their way into the legislation renewing the satellite distant-signal license.
The network reported a “dramatic spike in new subscribers” to its CBS All Access streaming service last weekend, compared with the same weekend in 2018. It didn’t say it was due to the retrans impasse that has blackout out CBS stations on AT&T’s DirecTV, DirecTV Now and U-Verse, but strongly implied it was in a press release. The release also contains other CBS talking points, including that AT&T has dropped 178 stations in 120 markets in 2019 because of its retrans recalcitrance.
On an earnings call today, Chairman and CEO Randall Stephenson suggested the two companies are not that far apart on terms that would make CBS stations available again for approximately 6.6 million subscribers to the company’s DirecTV or U-verse services. “The bid-ask candidly is not that wide, but it’s kind of an interesting dynamic,” he said. “We sent…[what] was a reasonable, fair offer over five days ago, and that’s been crickets. We haven’t heard anything.”
Unable to reach on agreement with CBS on programming fees, AT&T early Saturday morning dropped CBS’s broadcast and cable programming from its TV distribution services — DirecTV, DirecTV Now and U-Verse, according to CBS. “While CBS has made every effort to avoid this blackout, we won’t agree to terms that undervalue our hit programming enjoyed by nearly 240 million viewers across all dayparts last season,” the network said.
Every five years, satellite operators ask Congress to renew the law that gives them the right to import network affiliated broadcast signals into “white areas” where subscribers cannot get local affiliates off air. And every five years, the operators and their cable allies try to dirty the bill with provisions that will make it more difficult for broadcasters to negotiate for retransmisson consent fees. NAB’s job is clear: Convince Congress to kill the renewal legislation or pass a “clean” bill and make it permanent.
The fees include what the cable and satellite operators paid to cable networks as well as what they paid to broadcasters for retransmission consent, according to MoffettNathanson. The research firm also projects minimal gains in national TV advertising for the rest of this year, flat in the second and third quarter, dipping 1% in the fourth.
Retired LIN TV CEO Gary Chapman recounts how the NAB board decided to go for it all in 1991 — a law that that would empower TV station to either demand carriage on local cable systems or demand compensation for permitting carriage. The article is excepted from an article that is one in a series on the 25th anniversary of retrans becoming law at the Library of American Broadcasting at the University of Maryland.
While the American TV Alliance says retrans is “totally rigged” in favor of the broadcasters, the broadcasters target AT&T for “greed that has led it to cannibalize its own [U-Verse] service and mistreat its own customers.” AT&T also owns DirecTV.
The station group and owner of DirecTV and U-Verse cannot come to terms on a new retransmission consent pack and so exchanging harsh words on their website in battle for hearts and minds of consumers.
Meredith-owned WNEM has yet to work out a retransmission consent agreement with AT&T and DirecTV, and the station has told viewers that if a deal hasn’t been struck by Sept. 21, it won’t be available to those subscribers.
The station group and and satellite operator agreed to a 48-extension of their current deal, which was set to expire last night, suggesting that they are close to long-term deal.
Heartland CEO Bob Prather says the prior agreement with the satellite service expired in January and that DirecTV had continued to carry the stations since then under a series of extensions. But the negotiations finally broke down yesterday with DirecTV saying it would not meet Heartland’s final demands.
When Tom Wheeler took the reins at the FCC, the thought was that he would side with the cable operators he used to represent. Well, Wheeler didn’t on retrans, opting not to put in place regulations that would have hobbled broadcasters’ ability to negotiate for fees. Yes, Wheeler was chief spokesman for cable in the 1980s, but he has proven to be no cable guy.
The MVPDs continue to nag the FCC to regulate retrans, arguing that they are being forced to pay too much for broadcast signals. But new data from SNL Kagan once again confirms that broadcasters are being undervalued and underpaid by the MVPDs for their signals — and always have been. Broadcasters account for a third of the MVPDs’ audience, yet they receive only 16.7% of the fees the MVPDs pay to programmers.
Millions of Dish subscribers lost access to 42 TV stations Sunday night after Dish and Tribune failed to reach an agreement on renewing their retrans deal.”Tribune is demanding an unreasonable rate increase for channels that are available for free over the air,” said Dish’s Warren Schlichting.
Maybe so, says the General Accountability Office in a congressionally mandated study. A market-based approach to licensing broadcast programming to cable and satellite operators might be a better way, it says. If it works in the OTT world, why not cable and satellite, it asks. One sticking point is what to do with must-carry rules, which rely on the compulsory license.
Tilting rules governing retrans negotiations in favor of cable and satellite could accelerate the migration of sports programming to the pay media, NBC affiliates say in visit to the FCC last week.
Heads, the FCC listens to CBS’s Les Moonves and other broadcasters who are urging it to leave the retrans rules alone so they can continue to get fee increases. Tails, the agency agrees with Massillon Cable TV’s Bob Gessner and other cable operators who contend retrans needs to be overhauled to decrease broadcasters’ leverage and curtail the fees. How the coin will land is anybody’s guess — and the coin is worth billions.
The American Cable Association says the $4.6 billion deal will give Nexstar 115 Big Four affiliates in 101 markets and undue leverage in retrans negotiations. With the leverage, Nexstar would “drive up…fees (and, in turn, consumer prices) and…increase the risk and incidence of broadcast programming blackouts.” As an alternative to denial, ACA suggests forcing Nexstar into “baseball-style arbitration” or preventing its use of “after-acquired station” clauses.
Just this week, the trade group succeeded in getting a rider attached to the new budget bill grandfathering current JSAs. And in October, it managed to derail another Tom Wheeler anti-broadcasting measure — eliminating the so-called exclusivity rules that effectively block the importation of distant signals into markets. While there are more challenges ahead in the new year, the NAB leadership and staff should spend the holidays reveling in their accomplishments.
The cable trade group tells the FCC that in the nearly five years since the commission began looking to reform its retransmission consent rules, “two retransmission consent election cycles have come and gone, consumers have experienced 558 blackouts, prices have risen about 40% each year and demands for carriage of other and often unwanted programming have increased. The time for decisive and muscular commission action has arrived.”
The cable group tells the FCC that blocking viewers’ access to online programming, “when used by broadcasters as a tactic in retransmission consent negotiations, should be deemed to violate the duty to negotiate in good faith.”
“Given the history of the pay TV industry and its consumer pricing and customer service practices, the commission cannot rationally conclude that consumers will benefit from government policies designed to increase substantially the marketplace power of pay TV and broadband gatekeepers,” the broadcast trade group says. The proposed changes will not reduce station blackouts, “in fact, they may well increase those impasses,” it adds.
Bayou City Broadcasting says the dispute, related to underpayment of retransmission fees by the satcaster, is over and it is “very satisfied with the outcome as well as the expeditious nature of the resolution.”
FCC Chairman Tom Wheeler’s push to eliminate the exclusivity rules is on indefinite hold, according to an agency source. The NAB has been working to derail the effort, concerned in part that elimination of the rules would undermine broadcasters’ ability to negotiate for retrans fees.
A month ago, the FCC released its Notice of Proposed Rulemaking looking to reassess the requirement that broadcasters and MVPDs engage in “good faith” negotiations over retransmission consent, triggering numerous questions throughout the industry (and among financial analysts) as to what that release meant. On Friday, the NRPM was published in the Federal Register, setting the dates for the filing of comments on the questions raised by the commission. Comments are due on Dec. 1, reply comments on Dec. 31.
The station group and satellite operator have agreed to a 24-hour extension of their retransmission consent deal as talks continue. The current agreement was scheduled to expire at 7 p.m. ET this evening.
FCC Mass Media Bureau Chief Bill Lake rejects broadcasters’ assertion that the rules are “inextricably linked” to the compulsory copyright license and that their elimination will effectively give cable and satellite operators “a free ride” to carry broadcast signals without paying for them.”The asserted inextricable link does not exist — nor does the imagined free ride,” he says.
The commission is seeking comment on whether to update the standards that it considers for determining whether parties have negotiated in good faith for retransmission consent of a broadcast signal. Comments will be due 60 days after publication in the Federal Register; reply comments will be due 30 days later.
NAB Joint Board Chairman Dave Lougee doesn’t like to make predictions about how the association’s policy initiatives will turn out, but he promises it is working hard to insure that FCC doesn’t tip the scales in favor of MVPDs in retrans negotiations, that the incentive auctions benefit sellers without harming non-sellers and that TV broadcasters have the option of moving to a superior transmission standard.
DirecTV announced a new carriage deal with KFMB, the CBS affiliate in San Diego, and returned the station to its lineup after a nearly three-week blackout. The satcaster lost the station in mid-August when it could not reach a new agreement with the station’s owner, Midwest Television.
In opening a proceeding to review what it means for broadcasters and MVPDs to negotiate retrans deals in good faith, the FCC says its goal is to “benefit consumers of video programming service by facilitating successful negotiations and avoiding disruptions in service.”
The owner of the Evansville, Ind., CBS affiliate, DuJuan McCoy, files a lawsuit alleging the satellite operator, by prorating retrans payments, is depriving him of “significant revenues.”
Shortly after FCC Chairman Tom Wheeler ordered the Media Bureau to intervene in the blackout, the broadcaster and satellite provider agreed on terms of a new contract.
Nine days after Sinclair Broadcast Group and Dish Network extended their deadline for a retransmission agreement, the company’s 150-plus stations are gone from the satcaster in 79 markets nationwide. Maryland-based Sinclair’s stations include affiliates of ABC, CBS, NBC, Fox and the CW, and with the fall TV season approaching — and the NFL regular season a mere 16 days away — the stakes are high. Sinclair last month re-upped is affiliate deal with CBS, which carries Sunday pro football games.
In the latest round of the never-ending debate over retransmission consent reform, broadcasters are pointing the finger at a few “bad actors” for causing the bulk of local blackouts. Singling out recent disputes involving Dish, Mediacom Communications and DirecTV, the NAB, in a meeting last week with GOP commissioner Ajit Pai’s office, suggested the FCC should apply a “bad actor factor” when the commission considers a good faith complaint.
An estimated 150,000 DirecTV customers in the San Diego region have lost access to Midwest Television-owned CBS affiliate KFMB. The family-owned TV station’s signal was removed from the satellite giant’s systems at 5 p.m. Thursday — two hours before a preseason NFL contest that saw the San Diego Chargers defeat the Dallas Cowboys.
Dish Network and Sinclair Broadcast Group agreed on a short-term retransmission contract extension, easing a standoff between the companies that threatened customer access to 153 Sinclair stations in 79 markets nationwide.
Some may downplay FCC Chairman Tom Wheeler’s plans to eliminate the network non-dupe and syndicated exclusivity rules, but that would be a mistake. The move means that cable and satellite operators have likely won the first battle in their campaign to rewrite the retrans rules and undermine broadcasters’ ability to negotiate for higher fees.