For television broadcasting companies, the collection of retransmission fees has proved to be a safety net for their publicly traded stock, guaranteeing quarterly income that in some cases has eclipsed that of ad dollars.
This is a problem for many MVPDs — the cable companies and DBS service providers, DISH Network and AT&T-owned DirecTV. For them, rate hikes seen by some of broadcast TV’s biggest station ownership groups are out of control, forcing MVPDs to pass the higher cost on to consumers through bill increases.
As 2019 enters its third day, one of the ugliest disputes to involve a major MVPD and one of the nation’s biggest station owners is unfolding in the nation’s two biggest markets, and in locales across the U.S. that just happen to include to big National Football League cities — presenting myriad problems for the NFL, viewers, and advertisers.
Tribune Broadcasting and Charter Communications-owned Spectrum are at war. A Saturday morning resolution is hoped for. It may not happen, given the war of words already underway.
One of the most visible — and alarming — retransmission fee disputes to date reached a new zenith at 5pm Eastern on Wednesday (1/2). That’s when Tribune stations in 24 markets are yanked, by law, from Charter Communications’ Spectrum lineups.
The move came as Tribune’s old agreement with Spectrum expired with no new deal in place. Some 6 million viewers are impacted, with 33 Tribune-owned stations including KTLA-5 in Los Angeles and WPIX-11 in New York now dark.
These are two of the largest affiliates of The CW network. But, also gone are FOX affiliate KCPQ-13 in Seattle and CBS affiliate WTTV-4 in Indianapolis.
That’s bad news for the NFL, which could step into the fray soon if a new deal between Spectrum and Tribune cannot be struck within 48 hours.
Also unavailable to Spectrum subscribers is WGN America, the basic cable MVPD-distributed offering.
In an announcement distributed Wednesday evening, Tribune Media SVP/Corporate Relations Gary Weitman said, “We’re extremely disappointed that we do not have an agreement on the renewal of our contract with Spectrum. The NFL playoffs are in jeopardy—beginning this weekend with critical games in some key markets like Indianapolis and Seattle. We don’t want Spectrum subscribers to miss these games.”
Weitman added that Tribune offered Spectrum “fair market rates for our top-rated local news, live sports and high-quality entertainment programming, and similarly fair rates for our cable network, WGN America. Spectrum has refused our offer and failed to negotiate in a meaningful fashion.”
Spectrum did not issue a press release in response to Tribune’s claims. Rather, it went directly to its subscribers.
In Hurley, New York, Kathleen Reuben, a mother of two young girls, wanted to watch WPIX-11. Instead of The Goldbergs at 6:30pm, she saw the image shown at left.
Several other images appeared, rotating every six or seven times.
Each were highly accusatory of Tribune, noting that it is the owner of WPIX-11 that has “removed their programming from Spectrum to create hardship for our customers, while we are negotiating in good faith to reach a fair agreement.”
In a statement, Charter noted that Tribune wants an increase of more than double of what it was paying in its now-expired agreement with the company that intends to merge with Nexstar Media Group. “That is more than what we pay any other broadcaster. They’re not being reasonable.”
Viewers to WPIX-11 saw the following statement:
Reuben then sneered when seeing the following message from Spectrum:
She remarked that across much of the Mid-Hudson Valley, some 90 miles north of New York City, no over-the-air channels can be received with a free TV antenna. Thus, the only other option for TV reception is a DBS provider — DISH or DirecTV. Regarding the availability online of WPIX programming, Reuben said, “Who has the time to try to connect to WPIX via the Internet, going over to Roku and then downloading an app and then trying to find what to watch?”
Other messages were displayed, each putting the blame not on Spectrum, which has continually driven rates upward and has an uncertain future in New York State as it is.
In August 2018, the New York State Public Service Commission (PSC) voted to revoke its approval for Charter’s merger with Time Warner Cable. How Charter-Spectrum would depart the Empire State, as ordered by the PSC, is an unanswered question that could take years of challenges to fully resolve.
The PSC moved forward with the surprising decision after it found that Charter did not live up to its commitments following its 2016 merger with Time Warner to step up broadband connectivity in underserved areas.
Charter stated that this was untrue.
However, RBR+TVBR in July 2017 detected connectivity issues in Schulyer County, home to Watkins Glen, and in southern Warren County, close to the resort community of Lake George.
While Spectrum’s future in New York hangs in the balance, it has a big tangle with Tribune as an immediate issue in need of resolution, for it involves a host of other markets — not the least of which are San Diego and Los Angeles.
Thanks to the Time Warner merger, Charter Spectrum became the dominant cable service provider across Southern California. As such, a significant portion of KTLA’s viewership has been neutered.
While WPIX’s website contained a special message, KTLA offered a full-blown news story explaining to its 1.5 million viewers that rely on Spectrum for a signal why it was getting messages such as this one, seen below:
In San Diego, FOX affiliate KSWB-5 is displaying the message, at left, too.
And, while it was previously reported that Spectrum customers would be unable to watch the KTLA-produced Rose Bowl parade coverage airing across most Tribune-owned stations, the old agreement between Charter Communications and Tribune Media was extended from 9pm Pacific Monday.
Also in an on-screen message to subscribers, Charter-Spectrum in New York noted that its negotiations “are always about one thing; reaching an agreement that is fair to our customers.”
Spectrum then noted that subscribers could “voice their concerns” by visiting www.tribunefairdeal.com
The American Television Alliance (ATVA), a Washington-based pro-MVPD lobbying group, has been vigilantly following every “blackout” caused by a retransmission fee dispute.
“The New Year is always a favorite blackout target for broadcasters but this is by far the worst it’s ever been,” Trent Duffy, the ATVA’s spokesman, told RBR+TVBR. “The bad news is that 2019 won’t be any better unless Congress and the FCC act to protect consumers and modernize the outdated video laws that were designed for a marketplace that hasn’t existed for a decade.”
With the Democrats taking over the House of Representatives as the FCC winds down most operations thanks to a lack of Federal funding due to the partial shutdown of the U.S. Government, any action on retransmission fees could be well off in the distance.
That might be welcome news to broadcast TV companies that profit from the dollars MVPDs earn from distributing “free” signals, but only sets the stage for further disputes that could be even uglier and more disruptive than the battle waged between Spectrum and Tribune.
— With reports from RBR+TVBR in Brooklyn, N.Y.
Photo credit: Kathleen Reuben