RETRANS WARS (UPDATED JAN. 2)

DirecTV Losing Fox Affils In Four Markets

Following a breakdown in retrans renewal negotiations with Northwest Broadcasting, DirecTV will be dropping at midnight the Northwest Fox affiliates in Yakima and Spokane, both Washington; KMVU Medford, Ore.; and Binghamton, N.Y. DirecTV CEO Mike White claims Northwest is asking for a 600% increase in fees.

The four small-market TV stations of Northwest Broadcasting will be coming off DirecTV at midnight tonight after Northwest and the satellite operator failed to reach an agreement on new retransmission consent payments, according to Northwest President Brian Brady.

The stations: KFFX Yakima-Pasco-Richland-Kennewick, Wash.; KMVU Medford-Klamath Falls, Ore.; WICZ Binghamton, N.Y., and KAYU Spokane, Wash.

All are Fox affiliates.

The loss of service will affect 160,000 homes in the four markets.

Brady, who is also the chairman of the Fox affiliate board, would not say what he was asking for in the negotiations or what DirecTV was offering, except in general terms.

“All we are looking for is an equitable deal,” he said.

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“They want us to pay pennies on the dollars. Stations want to be compensated for the value that they bring.”

DirectTV CEO Mike White said that Northwest is asking for a 600% increase.

“We are appalled by the irresponsible behavior of Northwest Broadcasting, which has decided they would rather deprive our customers of their local channels, than make even an honest and good faith attempt to reach a fair deal in contract negotiations,” White said in a prepared statement.

“For local broadcast station owners to brazenly hold viewers hostage in an attempt to extort fees that are astronomically higher than what we pay other local broadcasters is flat out wrong. We hope that Northwest will ultimately come to the table in good faith to discuss reasonable terms and fees and they will quickly restore programming to our customers.”

Brady responded to DirecTV’s press release with one of his own, which didn’t directly dispute DirecTV’s claim that Northwests was demanding a 600% hike.

The current contract is 10 years old and no longer represents the reality of the marketplace and cannot be used a the basis for a new agreement, Brady said in the statement. “Rather the new agreement should reflect today’s marketplace and what DirecTV and other MVPDs are paying programmers for their content.”

“What Direct TV fails to disclose is that they have been reselling our programming to their customers at a mark-up of over 1000%. This is not about Northwest negotiating in bad faith or extortion of any kind. It is about Direct TV, a multi-billion dollar company, trying to protect their profit margins at broadcasters expense.”

 


Comments (7)

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Dante Betteo says:

December 31, 2010 at 3:59 pm

OTA TV is a bargin.

Brian Walshe says:

December 31, 2010 at 4:47 pm

Time to post the billboards saying “Get Fox_ _ for FREE! Use your antenna. Visit myfox–.com for details!”

Al Ming says:

January 3, 2011 at 9:41 am

Keep up the good work, Brian. Make a reality out of this……you know exactly what you’re doing; we could all use your aggressive stance as a crystal clear example. Good luck.

Jonathan Lemire & Laurie Kellman says:

January 3, 2011 at 10:25 am

We recently called Direct and inquired about the cost to add the local stations. Their quote was $10 per month as the local stations were part of the High Def package. If the subscribers are being charged $10 per month, then it seems only fair that each local station should receive something closer to $1.00 (one dollar) per month per sub. The subscribers are being charged thus the local stations should receive a fair fee. Few stations are being paid more that .25 (twenty five cents). Most stations actually receive far less than a quarter per sub. Fair is fair.

kari hamon says:

January 3, 2011 at 2:56 pm

All of the service providers love to throw out their rhetoric about how we are gouging them for fees. Lets ALL be sure the public understands the issues of how cable and satellite take our signals to turn a profit, are willing to pay everyone else much more than they will negotiate with us, and we provide the signal for free over the air to the same consumer. Great job Brian, we are all in full support of your efforts.

Warren Harmon says:

January 3, 2011 at 3:16 pm

FOD! I am betting the satellite operators would rather not have to carry all the local JUNK, get a grip O&Os, your content is not sought after, only what passes through your portals and is broadcast OTA without charge to the consumers pocket book, the consumer does infact PAY by enduring all the fricken advertising. What was thet song, hmmm, “Money for Nothing” I want my MTV (and will gladly pay for it. Take your O&O greed and fade away.

fra bro says:

January 12, 2011 at 1:19 pm

Some of us live in rural areas without ota access.
I have copied and pasted a direct quote from DTV CEO Michael White talking during their 2009 Q4 Earnings call…”Frankly, it still amazes me that Pay TV Providers as a group continue to rank at the bottom of the ACSI survey year-after-year. Somehow, we must and will crack the code on the challenge of providing world class customer experience every day.”
Mr White, this dispute is an excellent example of why Pay TV Subscribers rate their providers so bad!
Large corporations have lost focus of what makes them money. The only way to efficiently put money into your shareholders pockets is to keep us the customer happy. If you keep losing unhappy customers you will have to continue cutting services in order to profit. Eventually all you have is a mediocre product that is no longer competitive in the marketplace.

I do understand that they claim Northwest Broadcasting (local Fox Distributor) is demanding 600% increase to allow rebroadcast of the Fox station. I do not however believe that this is the full truth or that it is as expensive an increase as it sounds.
After reading of their 2009 Q4 profits of $697 million (I know, OPBDA) But that’s ONE QUARTER!!! I can’t help but wonder if their shareholders couldn’t afford to give up a couple pennies per share in order to absorb this increase for us customers.


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