AT&T CEO: Optimistic in Deal with CBS to End Blackout, But Nexstar Could Take a While

This month, AT&T has engaged in two major disputes with local content owners — Nexstar and CBS, which has seen their channels pulled from the service. The feud is over retransmission fees — which is the amount AT&T pays to carry the locals. On today’s second quarter earnings call, AT&T CEO Randall Stephenson seemed optimistic about a deal with CBS, but said a deal with Nexstar “could take a while.”

Nexstar, which currently owns ~175 local stations, and will become the largest local broadcaster after their purchase of Tribune, is a major blow for AT&T customers. On the call, Stephenson said, “Nexstar as you know, basically their product is broadcast the four big broadcast stations — free over-the-air content I might add — their opening bid of the negotiation was 100% increase.” While Stephenson says they’re are now asking for a 50% increase, he says that the company is “going to have to be resolute on that one, we’re not going to impose those type of price increases on our customers.”

On Monday, CBS went dark in 17 markets on DirecTV and AT&T U-Verse and nationally on DIRECTV NOW. Additionally, CBS Sports Network was dropped from DirecTV and for legacy DIRECTV NOW subscribers, while Smithsonian Channel was removed from DirecTV.

Stephenson feels the two sides are not that far apart from a deal. “On CBS, it’s an interesting situation, the bid-ask candidly is not that wide, but it’s kind of an interesting dynamic,” said Stephenson, but he shared the company has yet to get a counter to their latest offer. “We sent what I thought was reasonable and fair offer five days ago and it’s been crickets…when we are as close as we are, I find it interesting, that we’re still sitting here dark and not having an interaction with CBS.”

While Nexstar appears like it will be a longer-term dispute, it sounds like AT&T and CBS should have their dispute resolved for the 6.5 million affected customers in time for NFL and College Football Season.