Post by The Ultimate Nullifier on Nov 10, 2016 20:52:02 GMT -6
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The Justice Department filed a 57-page antitrust lawsuit against DirecTV alleging that they conspired with other pay TV operators against picking up SportsNet LA. The claim is that Dan York, an executive with DirecTV, shared information and conspired with Cox and Charter Communications to reach an agreement that none of them would carry the station and if they did, they'd keep each other informed of any changes.
York would be known to some wrestling fans as the guy who was in charge of PPV revenue distribution when ECW was going out of business and Paul Heyman had claimed held back and slowed down on sending revenue which was one of the contributing causes of the promotion going out of business.
www.wsj.com/articles/dojs-directv-suit-over-dodgers-channel-feeds-cable-programmers-fears-1478205608
DOJ’s DirecTV Suit Over Dodgers Channel Feeds Cable Programmers’ Fears
Justice Department lawsuit alleges collusion by pay TV providers over Dodgers channel
Cable programmers might get chills reading the Justice Department’s 57-page antitrust suit against DirecTV that alleges the satellite broadcaster colluded with other pay-TV operators in rejecting carriage of the Dodgers channel SportsNet LA.
The suit says that DirecTV, led by senior executive Dan York, shared information about SportsNet LA with other pay TV providers in Los Angeles, including Cox Communications and Charter Communications, as they were negotiating with the channel’s distributor, Time Warner Cable. The strategy was to reach a tacit agreement that none would carry the channel when it launched in 2014.
The suit details numerous communications between DirecTV’s Mr. York and his counterparts at other companies. The revelations will confirm the fears of many programmers that pay TV operators often work with each other and confer on strategy when it comes to negotiating content deals.
In one example outlined in the suit, an unidentified executive from Cox Communications allegedly called Mr. York after Time Warner Cable had said a pay TV operator was near a deal to carry SportsNet LA. Mr. York told the executive that DirecTV was not the distributor, which was good news to Cox since DirecTV was its biggest competitor in the market. The two executives also agreed to alert each other with a “heads up” before one agreed to launch the channel, something that hasn’t happened yet.
Mr. York even had a breakfast with a Cox executive in New York in fall of 2013 in which they discussed rising sports costs including the likelihood that the cost to carry Dodger games would be going up, according to the suit.
Another time, an AT&T executive shared details of a pitch he received from Time Warner Cable via a text message with Mr. York, saying it was similar to the one DirecTV had received. “Hope u hit it out,” Mr. York texted back, according to the suit. AT&T, which operates the U-Verse pay TV service in the Los Angeles area, has since acquired DirecTV.
Mr. York seems to have been most chummy with Charter Communications, ironic now given that Time Warner Cable and Charter merged earlier this year and now the operator carries SportsNet LA.
“The sharing of this competitively sensitive information among direct competitors made it less likely that any of these companies would reach a deal,” the suit said. None wanted to carry SportsNet LA because its distributor Time Warner Cable was seeking a monthly fee of close to $5.00 per-subscriber, which was significantly higher than what the previous rights holder – 21st Century Fox’s Prime Ticket – had charged.
While most of the conversations in the suit were about the Dodgers situation, some were about other networks and even rival programming services.
The suit also claims that Charter aided DirecTV when it was in a feud with the Weather Channel in 2014 over carriage fees.
In that case, DirecTV had stopped carrying Weather Channel, which responded by taking out ads critical of the satellite broadcaster. Charter, according to the suit, rejected the ads, telling Mr. York in a voice mail that the favor was “my little bit for the planet earth.”
The suit also said Charter and DirecTV engaged in conversations about letting their customers access Hulu, the online video service co-owned by 21st Century Fox, Walt Disney Co., Comcast Corp. and Time Warner Inc.
In a statement, DirecTV-owner AT&T said, “By its very nature, a lawsuit is only one side of the story. We look forward to presenting all the facts as the case progresses.” The company said Mr. York was not available for comment.
Cox and Charter weren’t named as defendants in the lawsuit. Charter declined to comment.
Cox said in a statement Wednesday said, “We are gratified that we were not named as a defendant. We continue to be committed to making independent decisions on program content.”
When Time Warner Cable agreed to a 25-year, $8.35 billion deal to distribute the Dodgers network, much of the industry, consumer groups and media analysts saw it as further proof that sports rights costs were skyrocketing out of control. The Time Warner Cable bid topped by $2 billion the offer from incumbent rights holder Fox Sports West, a unit of 21st Century Fox, according to people familiar with the terms.
Time Warner Cable might have had better luck with DirecTV and the others if the Dodger channel hadn’t come so soon after it had acquired rights for the Los Angeles Lakers in a deal valued at $3 billion over 20 years with an option for another five years for $2 billion. As it did with the Dodgers, Time Warner Cable launched a channel dedicated to just the Lakers at a high price. Distributors agreed to carry it given the popularity of the franchise.
However the Lakers have since gone into a tailspin and ratings have fallen for the team. Distributors felt hustled on the Laker channel – known as SportsNet – and were reluctant to pay even more for a Dodger network.
The two new channels meant that Los Angeles had seven outlets devoted to local sports, making the city a symbol for the glut of sports networks driving up pay-TV costs.
The Justice Department filed a 57-page antitrust lawsuit against DirecTV alleging that they conspired with other pay TV operators against picking up SportsNet LA. The claim is that Dan York, an executive with DirecTV, shared information and conspired with Cox and Charter Communications to reach an agreement that none of them would carry the station and if they did, they'd keep each other informed of any changes.
York would be known to some wrestling fans as the guy who was in charge of PPV revenue distribution when ECW was going out of business and Paul Heyman had claimed held back and slowed down on sending revenue which was one of the contributing causes of the promotion going out of business.
www.wsj.com/articles/dojs-directv-suit-over-dodgers-channel-feeds-cable-programmers-fears-1478205608
DOJ’s DirecTV Suit Over Dodgers Channel Feeds Cable Programmers’ Fears
Justice Department lawsuit alleges collusion by pay TV providers over Dodgers channel
Cable programmers might get chills reading the Justice Department’s 57-page antitrust suit against DirecTV that alleges the satellite broadcaster colluded with other pay-TV operators in rejecting carriage of the Dodgers channel SportsNet LA.
The suit says that DirecTV, led by senior executive Dan York, shared information about SportsNet LA with other pay TV providers in Los Angeles, including Cox Communications and Charter Communications, as they were negotiating with the channel’s distributor, Time Warner Cable. The strategy was to reach a tacit agreement that none would carry the channel when it launched in 2014.
The suit details numerous communications between DirecTV’s Mr. York and his counterparts at other companies. The revelations will confirm the fears of many programmers that pay TV operators often work with each other and confer on strategy when it comes to negotiating content deals.
In one example outlined in the suit, an unidentified executive from Cox Communications allegedly called Mr. York after Time Warner Cable had said a pay TV operator was near a deal to carry SportsNet LA. Mr. York told the executive that DirecTV was not the distributor, which was good news to Cox since DirecTV was its biggest competitor in the market. The two executives also agreed to alert each other with a “heads up” before one agreed to launch the channel, something that hasn’t happened yet.
Mr. York even had a breakfast with a Cox executive in New York in fall of 2013 in which they discussed rising sports costs including the likelihood that the cost to carry Dodger games would be going up, according to the suit.
Another time, an AT&T executive shared details of a pitch he received from Time Warner Cable via a text message with Mr. York, saying it was similar to the one DirecTV had received. “Hope u hit it out,” Mr. York texted back, according to the suit. AT&T, which operates the U-Verse pay TV service in the Los Angeles area, has since acquired DirecTV.
Mr. York seems to have been most chummy with Charter Communications, ironic now given that Time Warner Cable and Charter merged earlier this year and now the operator carries SportsNet LA.
“The sharing of this competitively sensitive information among direct competitors made it less likely that any of these companies would reach a deal,” the suit said. None wanted to carry SportsNet LA because its distributor Time Warner Cable was seeking a monthly fee of close to $5.00 per-subscriber, which was significantly higher than what the previous rights holder – 21st Century Fox’s Prime Ticket – had charged.
While most of the conversations in the suit were about the Dodgers situation, some were about other networks and even rival programming services.
The suit also claims that Charter aided DirecTV when it was in a feud with the Weather Channel in 2014 over carriage fees.
In that case, DirecTV had stopped carrying Weather Channel, which responded by taking out ads critical of the satellite broadcaster. Charter, according to the suit, rejected the ads, telling Mr. York in a voice mail that the favor was “my little bit for the planet earth.”
The suit also said Charter and DirecTV engaged in conversations about letting their customers access Hulu, the online video service co-owned by 21st Century Fox, Walt Disney Co., Comcast Corp. and Time Warner Inc.
In a statement, DirecTV-owner AT&T said, “By its very nature, a lawsuit is only one side of the story. We look forward to presenting all the facts as the case progresses.” The company said Mr. York was not available for comment.
Cox and Charter weren’t named as defendants in the lawsuit. Charter declined to comment.
Cox said in a statement Wednesday said, “We are gratified that we were not named as a defendant. We continue to be committed to making independent decisions on program content.”
When Time Warner Cable agreed to a 25-year, $8.35 billion deal to distribute the Dodgers network, much of the industry, consumer groups and media analysts saw it as further proof that sports rights costs were skyrocketing out of control. The Time Warner Cable bid topped by $2 billion the offer from incumbent rights holder Fox Sports West, a unit of 21st Century Fox, according to people familiar with the terms.
Time Warner Cable might have had better luck with DirecTV and the others if the Dodger channel hadn’t come so soon after it had acquired rights for the Los Angeles Lakers in a deal valued at $3 billion over 20 years with an option for another five years for $2 billion. As it did with the Dodgers, Time Warner Cable launched a channel dedicated to just the Lakers at a high price. Distributors agreed to carry it given the popularity of the franchise.
However the Lakers have since gone into a tailspin and ratings have fallen for the team. Distributors felt hustled on the Laker channel – known as SportsNet – and were reluctant to pay even more for a Dodger network.
The two new channels meant that Los Angeles had seven outlets devoted to local sports, making the city a symbol for the glut of sports networks driving up pay-TV costs.