DIRECTV Lawsuit Against Nexstar for Manipulating Retransmission Fees Dismissed by Judge; Appeal Possible
DIRECTV Lawsuit Against Nexstar for Manipulating Retransmission Fees Dismissed by Judge; Appeal Possible
DIRECTV is already considering an appeal of the decision, saying it sets a ‘dangerous precedent.’
DIRECTV won’t be getting any legal satisfaction from Nexstar, at least not for the time being. A judge has dismissed the antitrust lawsuit filed by DIRECTV against channel-owning group last March, saying that the satellite TV company did not demonstrate injuries direct enough to warrant the antitrust complaint.
- DIRECTV’s suit centered on retransmission consent fees it claims were unlawfully manipulated by Nexstar.
- Nexstar-owned stations went dark on DIRECTV, DIRECTV STREAM, and AT&T U-Verse from July through September 2023 thanks to a retrans dispute between the two.
- DIRECTV has also filed an informal complaint with the FCC regarding Nexstar practices.
The reason DIRECTV first dragged Nexstar into court was because the satellite provider claimed that Nexstar conspired with two other local station station owners, Mission Broadcasting and White Knight Broadcasting. DIRECTV argued that Nexstar influenced White Knight and Mission to demand higher retransmission consent fees for their stations, setting a new floor for fees when it came time for DIRECTV to negotiate with Nexstar.
DIRECTV says that it lost customers directly as a result of its inability to retransmit Mission and White Knight stations in their respective markets, but in a 17-page ruling Judge Kevin Castel picked apart the company’s arguments. He said that DIRECTV failed to prove definitively that it would have reached deals with Mission and White Knight without collusion from Nexstar, and it also could not demonstrate definitively that the customers in question would have stayed subscribed to DIRECTV if not for the dispute.
Judge Castel dismissed the complaint without prejudice, saying that, “DIRECTV’s injuries are too indirect and speculative to confer antitrust standing.”
Variety reports that for it’s part, DIRECTV is already thinking about an appeal.
“This ruling sets a dangerous precedent that a victim of price-fixing needs to pay the inflated price before it can make a claim in court,” a statement from DIRECTV said.
“We’ll let the court’s decision speak for itself,” a Nexstar spokesperson said when the ruling became public.
The wrangling over White Knight and Mission retrans fees spilled over to Nexstar, which pulled hundreds of its stations from DIRECTV’s airwaves in July 2023 after failing to reach a new deal with satellite and streaming distributor. Those stations stayed dark until September when a new deal restored them. But by that point, DIRECTV had undoubtedly lost a segment of customers in affected markets who were tired of not being able to watch specific local channels.
What’s Next for Nexstar?
Despite the ruling, Nexstar may not be completely out of the woods when it comes to DIRECTV. In addition to ta potential appeal of Judge Castel’s decision, Nexstar may have to grapple with fallout from a complaint filed by DIRECTV with the Federal Communications Commission (FCC) which states that Nexstar is violating rules regarding station ownership.
Federal law prohibits station owners from owning two of the top four broadcast networks in a given market, as well as from owning stations that reach more than 39% of the total TV audience in the United States. But DIRECTV’s complaint alleges that Nexstar exercises de facto control over Mission and White Knight, unlawfully allowing it to control more stations in some markets than would normally be allowed.
Nexstar doesn’t have to worry about these kinds of problems from Fubo, however. The two companies reached a new retrans agreement in January, avoiding a blackout similar to that experienced by DIRECTV customers. Immediately after, however, Fubo raised prices on each of its plans by $5 per month, a move likely prompted by the higher retransmission fees it had to pay Nexstar in the new agreement.
The recent ruling is an undoubted win for Nexstar and leaves DIRECTV with the same problems it had before the suit was filed. Pay-TV providers who charge more for their services because of rising retransmission fees often lose customers as a result of price increases, meaning they’ve got less revenue coming in from subscribers and more going out to station owners. It’s essentially a race to the bottom, and most major cable channel distributors are stuck trying to figure out how to slow their losses down.
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