Risk & Compliance

Feds Sue DirecTV over Dodger Channel Blackout

The pay-TV distributor allegedly colluded with competitors to refrain from making a carriage deal with the channel's distributor.
Matthew HellerNovember 3, 2016
Feds Sue DirecTV over Dodger Channel Blackout

The U.S. government has gone to bat for consumers in a three-year-old dispute between Time Warner Cable and pay-TV companies over a channel dedicated to Los Angeles Dodger baseball games.

TWC and the Dodgers agreed in 2013 to an $8.35-billion, 25-year deal to broadcast games but fans have been shut out from SportsNet LA as DirecTV and other distributors have refused to carry the channel, citing its steep monthly fee of $4.59 per subscriber.

In an antitrust complaint filed Wednesday, the Justice Department accused DirectTV of colluding with its local rivals to corrupt “the competitive process that should have resulted in each company making an independent decision” about whether to air the channel.

“Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace,” Deputy Assistant Attorney General Jonathan Sallet said in a news release.

According to the government, DirecTV’s director of content, Don York, orchestrated unlawful exchanges of information with AT&T, Cox, and Charter that included “non-public information about the status of DirecTV’s negotiations with TWC.”

“The sharing of this competitively sensitive information among direct competitors made it less likely that any of these companies would reach a deal because they no longer had to fear that a decision to refrain from carriage would result in subscribers switching to a competitor that offered the channel,” the complaint said.

AT&T is also a defendant in the case because it now owns DirecTV. As the Los Angeles Times reports, the suit comes at an awkward time for the company as it seeks regulatory approval for its proposed $85.4-billion acquisition of Time Warner Inc., which is separate from TWC.

“AT&T and DirecTV had too much power over the pay-TV, internet and content markets even before their … merger closed last year,” said Matt Wood, policy director of digital-rights group Free Press. “Now that they’ve joined forces, the absolute last thing we need is approval of a deal to put these bad actors in control of Time Warner’s video content empire.”