As viewers remain blacked out, DirecTV sues broadcasters

A dispute between satellite and digital carrier DirecTV and a local Fox affiliate, which blacked out the World Series and Super Bowl, has landed in federal court.

In a complaint filed last week, DirecTV is suing Nexstar Media Group and affiliated broadcast companies White Knight and Mission Broadcasting, which carries Fox in the Capital Region’s market.

The El Segundo, Calif.-based DirecTV claims Nexstar is violating anti-trust laws with the help of White Knight and Mission Broadcasting.

“Mission and White Knight are now unlawfully coordinating with Nexstar to raise prices and extract supercompetitive retransmission consent fees from DIRECTV,” reads the complaint filed in New York’s Southern District court.

The complaint acknowledges that the blackout of the local Fox affiliate, which started back in the fall, has prompted DirecTV customers to end their subscriptions and switch to other viewing options.

The precise number of people who have quit DirecTV, however, is redacted in the legal complaint. While DirecTV provides service through satellite dishes, it also works like many other television streaming services, such as YouTubeTV, Hulu and Sling, to provide through an app what was previously only available as traditional cable programming.

Satellite companies, like cable firms, bring their customers a variety of programming by paying retransmission fees to the content providers such as Fox or other networks.

But Mission and White Knight are contending that Nexstar is asking too much for the content.

The lawsuit provides a mini-window into how the complex satellite TV business works.

In order to get around anti-trust laws regarding broadcasting, the Irving,Texas-based Nexstar works with “sidecar” networks, or smaller companies like White Knight or Mission.

They are supposed to be independent although they work with larger firms like Nexstar to develop programming packages.

The lawsuit alleges that the sidecars in this instance have become little more than subsidiaries of Nexstar.

“Mission and White Knight have entered into an agreement in which they have effectively relinquished decision-making authority to Nexstar, which has served as the ringleader of a conspiracy to harm competition and violate the antitrust laws,” the lawsuit contends.

DirecTV also complains that Nexstar has deployed a third party consultant to act as a go-between with the two parties, but that that individual appears to be favoring Nexstar in negotiations.

The precise amount of money involved in these disputes isn’t clear since those are proprietary figures to a certain extent.

An estimate from Standard & Poors, reported earlier by the Fierce Video industry news site, estimated that the dispute is affecting 1.3 million viewers.

They estimated that the White Knight and Mission companies brought in $178.1 million worth of retransmission fees in the impacted areas in 2022. Satellite providers paid between $4.25 and $6.25 per subscriber to carry the broadcasters’ content.

Nexstar said they are confident they will win in court, contending they’ve done nothing wrong.

“Nexstar’s shared services agreements with White Knight and Mission Broadcasting are in full compliance with FCC rules, and each station group independently negotiates its own retransmission consent agreements with its cable, satellite, and telco partners,” Nexstar spokesman Gary Weitman said. “This lawsuit is without merit and Nexstar looks forward to prevailing in court.”

A Mission Broadcasting executive late last year said their costs for getting content have gone up sharply in recent years. That means they need to get more money from carriers like DirecTV.

In addition to the Capital Region, the Wichita Falls, Texas-based Mission Broadcasting serves 25 other markets nationally.

DirecTV also said that since 2006, the retransmission fees paid to companies like Nexstar
have increased 5,770 percent—from $214.6 million in 2006 to an estimated $12.6 billion in 2022.

DirecTV concedes in the complaint that many of the satellite customers can get some content for free with an over-the-air antenna. The complaint didn’t specify how many people use antennae.

“What was once a free product has become an increasingly costly burden on millions of American households,” the complaint said. Times Union