DirecTV sued Nexstar Media Group, Mission Broadcasting and White Knight Broadcasting in a New York federal court Tuesday, accusing the three broadcast station groups of “engaging in an illegal conspiracy” to manipulate the market for broadcast retransmission fees.
Since October, a total of 25 Mission and White Knight stations in 23 markets have been blacked out on DirecTV pay TV platforms. Both White Knight and Mission have agreements under which Nexstar manages ad sales, news production, equipment maintenance and other functions for stations.
DirecTV's suit accuses Nexstar, America’s largest broadcast station group, of making “sidecar” arrangements with smaller broadcasters to “skirt FCC station-ownership caps and other federal laws through collusive retransmission-consent negotiations.”
In all of the markets where Mission and White Knight have stations blacked out on DirecTV, Nexstar manages another major broadcast network affiliate. (DirecTV's press release has a large, unwieldy chart that shows what these stations and markets are.)
DirecTV's statement: “Mission and White Knight are now unlawfully coordinating with Nexstar to raise prices and extract supra-competitive retransmission consent fees from DirecTV in ‘overlap’ DMAs — those markets where both Nexstar and either Mission or White Knight each own a Big Four station. To accomplish this unlawful and anticompetitive aim, Mission and White Knight have entered into an agreement in which they have effectively relinquished decision-making authority to Nexstar.”
Nexstar's statement: “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. This lawsuit is without merit and Nexstar looks forward to prevailing in court. ”
You can see a copy of the suit here.
We were encouraged to wade through the actual complaint further, and it is full of well-articulated legal haymakers:
To accomplish their "unlawful and anticompetitive aim, DirecTV's lawyers say, "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."
DirecTV says further that Nexstar strategically restricts management for Mission and White Knight to engage the satellite TV company directly in negotiations, with overtures repeatedly rejected or ignored.
DirecTV further accuses Nexstar of masquerading the consultant who is handling the negotiations for Mission and White Knight, Eric Sahl, as an "independent" third party.■
