On the afternoon of Oct. 19, the MyNetworkTV affiliate serving the state of Hawaii suddenly faded to black for DirecTV subscribers across the state. The station still hasn’t returned to the lineup, and the station’s GM is furious.
He’s also painting a “David and Goliath” picture … even though Raycom is involved with the operaton.
What’s the true story behind KFVE-9 in Honolulu? Is AT&T-owned DirecTV playing fair, or is this another mud-slinging battle over “must carry” status? RBR+TVBR spoke with KFVE GM John L. Fink to get his take on the thorny situation.
As RBR+TVBR first noted on Oct. 20, KFVE-9 was “blacked out” for DirecTV customers at 6pm HST Thursday (midnight Eastern, Oct. 20).
The fade-to-back for KFVE is the latest dispute involving the failure of a new retransmission fee agreement between a service provider and a broadcast company, and the second ongoing dispute involving a TV station serving Hawaii.
Still off of DISH Network’s Hawaiian channel lineup is ABC affiliate KITV-4 in Honolulu, owned by a subsidiary of Lilly Broadcasting. KITV has been absent from DISH across the Hawaiian islands for a month.
The fight between KFVE and DirecTV is unique in many ways. Fink has been highly vocal of his station’s place in the 50th state, and of the value he believes it brings viewers.
“We are a thriving, local independent station,” Fink says.
Indeed, KFVE is perhaps unlike many other TV stations. Yes, it is a MyNetwork TV affiliate. However, the station branded as “KFVE The Home Team,” and its abundance of local programming is what makes the station stand out. No less than 10 locally produced shows air on KFVE. Additionally, it is the TV home of such annual events as the Merrie Monarch Festival, held each June, and the Keiki Hula Competition; “keiki” is the Hawaiian word for children.
“From 7pm weeknights KFVE airs a checkerboard of programs, in prime-time, that range from food to lifestyle to travel and local music,” Fink says.
Additionally, KFVE offers three hours of local programming on Sundays. “We showcase pre-season live NFL games plus ACC football and basketball,” Fink adds.
MyNetworkTV programs, including second-run episodes of The X Files, air after midnight.
“I don’t think there is one broadcast TV station in the U.S. that has 10 regularly scheduled programs, non-news, in their lineup,” Fink says. “Yet, DirecTV has not indicated why they have not talked to us any further level.”
A QUESTION OF VALUE
While DirecTV has been largely silent regarding its ongoing negotiations with KFVE’s owner, private equity firm MGC Capital Corp., it is abundantly clear why Hawaiian subscribers to the DBS provider can’t get the station.
DirecTV wants KFVE to elect “must carry” status. KFVE and Fink refuse to do so. They’ve elected for retransmission consent for 12 years, and believe there is strong value in what they offer viewers. But, the earliest negotiations saw the involvement of Raycom Media, KFVE’s current and ongoing shared services partner. Now, they don’t.
Asked why DirecTV is seeking this change of KFVE, Fink notes, “Perhaps they have new dictates because they are a part of AT&T.”
But, the other big accusation is that DirecTV doesn’t want to play fair with small independent broadcast TV station owners.
Such is the case with KFVE. Yes, it enjoys a Shared Services Agreement with Raycom Media. However, Fink makes it clear that Raycom doesn’t control KFVE.
This relationship allows KFVE and Raycom to enjoy the synergies provided by the appearance of Hawaii News Now on Fink’s station for two hours a day. This includes an exclusive 8am hour-long newscast, and half-hour editions at 6:30pm and 9pm.
“The other 22 hours a day I program — they have no influence or jurisdiction,” Fink says.
Also, sales is handled independently by KFVE staff, while Raycom provides marketing, accounting, and engineering support. Fink adds, “We never meet. We never talk. It is not a JSA.”
October 26 marked the ninth year of KFVE’s Station Services Agreement with Raycom.
A FIGHT TAKEN TO D.C.
“We are electing retransmission consent and we would like to have to have negotiations at that level,” Fink reiterates, adamant that KFVE will not accept a must carry election.
But, is DirecTV making this non-negotiable request in reaction to rapidly rising retransmission fees seen by TV stations across the nation — a move many say allows profits to remain strong as advertising revenue slumps?
Fink only notes that there have been no discussions on fee increases between KFVE and DirecTV. He refused to answer RBR+TVBR‘s query as to the percentage increase in retrans fees for KFVE between 2002 and August 31, 2017.
Instead, Fink turns the conversation to KFVE’s “value” compared to smaller cable TV channels — not exactly an apples-to-apples comparison when engaged in matters of retransmission consent for an over-the-air station.
“It’s a mistake that we’re not important to the DirecTV consumer,” Fink says.
This led to the unprecedented move by KFVE to file a complaint with the FCC, claiming that DirecTV has not followed Commission rules by failing to negotiate in good faith.
The complaint focuses on Fink’s version of the negotiations: DirecTV told KFVE to elect must-carry status, with no alternative.
The “Special Relief and Show Cause Petition” was filed under KFVE’s licensee name, HITV License Subsidiary, on Oct. 27. It is Docket No. 17-292 and bears CSR number “CSR-8943-C.” The respondent is DirectTV.
Commenting to Cablefax, which first reported on the Petition, an AT&T spokesperson said, “We want to get KFVE back into our Honolulu customers’ local lineups as soon as possible. Doing so requires permission from its owner, HITV, since FCC rules grant KFVE exclusive control over whether that station remains available on DirecTV. We’d like to resolve this matter quickly and reasonably.”
The statement is in direct contention with Fink’s complaint in that DirecTV is not being reasonable, and fails to note that “permission” would be giving in to DirecTV’s “take it or leave it” approach to negotiations.
As Fink — a 31-year veteran of KFVE — awaits word from the FCC on the retrans matter, he’s still awaiting Commission news on another matter. He’s been waiting for two years on KFVE’s sale to American Spirit TV.
The company’s 9 stations just happened to go dark on Sept. 22 on DirecTV systems in Columbus, Ga.; Toledo; Richmond; Jackson, Miss.; Lake Charles, La.; Wichita Falls, Tex.; and Wilmington, N.C.
All 9 stations have either JSAs or shared serves agreements with Raycom.
Could Raycom’s limited involvement be negatively impacting KFVE’s negotiations? Or, is it the close ties between American Spirit and Raycom that’s the issue?
The questions could be raised by the FCC as it reviews KFVE’s complaint.
In the meantime, DirecTV customers from Kauai to Kona are in the dark if they wish to watch KFVE.
“DirecTV, in its responses, has offered no reasons or explanations as to why, suddenly, KFVE is not deemed to be a worthy local station,” Fink concludes. “Could it be that we appear vulnerable and easy-pickings nowadays because we are negotiating alone for the first time, as the new FCC retrans/must carry rules mandate, without a local sister station or parent company of note beside us? This impasse is a David vs. Goliath example of everything that’s wrong when big entities ignore the wants and needs of local citizens.”
RBR+TVBR has close ties to the Hawaiian islands, thanks to our Ohana on the North Shore of Maui. It’s one more reason why RBR+TVBR brings our Members more than any other media industry publication from coast to coast — including the Kaanapali Coast.