Verizon Fios, TEGNA Ink A New Multi-Year Deal


While Verizon Fios doesn’t have a large national footprint, it does have a large number of subscribers in the Washington, D.C., area, in addition to the Tidewater region of Virginia and Western New York.

Those three markets are home to TEGNA stations that were blocked from subscribers since Jan. 1 due to, you guessed it, a retransmission fee dispute.

At 6pm Eastern on Thursday, a new deal was reached.

On New Year’s Day, subscribers to Verizon Fios — the communication company’s answer to Comcast’s Xfinity — lost access to CBS affiliate WUSA-9 across the National Capital Area. This includes Woodbridge, Va., where queries to RBR+TVBR‘s administrative offices arrived from users frustrated over their lack of access to CBS’s prime-time programming.

Also impacted were Verizon Fios subscribers in the Buffalo-Niagara Falls market, where NBC affiliate WGRZ-2 is “blacked out” as a result of the lapse of a retransmission fee agreement without an agreement on a new one.

The third market effected by the impasse is Norfolk, where ABC affiliate WVEC-13 was off of local Verizon Fios lineups.

Like other disputes between a MVPD and a broadcast TV station owner, including the Tribune Broadcasting war with Spectrum that is being felt across Southern California and the New York Tri-State area, the Verizon-TEGNA battle involved accusations from both sides of not playing fair.

After 72 tense hours, a deal was announced late Thursday by TEGNA.

“TEGNA has reached a multi-year carriage agreement with Verizon,” the company said in a brief statement.” WUSA, WVEC and WGRZ are now back on Verizon Fios lineups in their respective markets.

Verizon did not elaborate nor offer terms.

Until 6pm Thursday, the situation looked bleak. Verizon took to its website to accuse TEGNA of proposing “a significant rate increase for the same stations they provide today.”

For Verizon, “The rising cost of programming is the single biggest factor in higher TV bills, and we are standing up to broadcasters like TEGNA in order to protect you from rate increases.”

Verizon further argued that it has given TEGNA “a reasonable offer” to continue providing access to their stations. Unfortunately, they rejected TEGNA’s offer. “An increase of the size proposed by TEGNA would force us to pass these costs onto you, which we are unwilling to do.”

But, is that true? Or, was Verizon seeking to protect its executive compensation and/or quarterly earnings as healthy as possible? Verizon shares are near five-year highs seen in November, and in Q3 saw its net income rise 35.5% to $5.06 billion. Year-over-year Fios revenues climbed 1.6% to $2.99 billion.

Since August 1, 2018, Hans Vestberg has served as CEO of Verizon. He succeeded Lowell C. McAdam, who retired at the end of 2018 and is now non-Executive Chairman. Vestberg’s base salary is $1.5 million. But, as Verizon noted in an SEC filing made in June 2018, Vestberg’s target short-term incentive opportunity will rise from 150% to 250% of that base salary; his target long-term incentive opportunity jumped from 600% to 800% of his base salary.

For the Verizon Fios customer who couldn’t get WGRZ, WVEC or WUSA for three days, that might be irksome.

On WUSA-9’s website, the TEGNA station put the blame on Verizon, saying, “Verizon is taking away your favorite CBS programming, including the NFL playoffs and Super Bowl, beginning with this Sunday’s Wild Card game between the L.A. Chargers and the Baltimore Ravens; College Basketball, including this Saturday’s game between Georgetown and St. John’s; and entertainment programming such as NCIS, Madam Secretary, Seal Team, Criminal Minds and Big Bang Theory, as well as your local news, weather and sports.”

That’s now moot, as WUSA has an agreement not only with Verizon Fios, but with all other MVPDs in the Washington DMA, including DirecTV, Comcast and Cox.

— Additional reporting by April McLynn, from Woodbridge, Va.