DirecTV has filed a lawsuit against Nexstar Media Group, the country’s largest operator of local television channels, claiming it is fixing prices with competitors White Knight Broadcasting and Mission Broadcasting.
Filed on Tuesday in a U.S. District Court in New York, the lawsuit claims the three local TV operators work together to “manipulate, raise, and fix” retransmission consent fees.
The operators purportedly collude in markets where they own all of the local affiliates for major networks ABC, CBS, NBC, and Fox, DirecTV asserted in a press release.
“The fees distributors pay for permission to offer their customers local broadcast stations have soared more than 5,000% in the past 17 years and is [sic] the single largest source of rising costs facing video consumers today,” DirecTV said.
Mission noted earlier this year that the fees it pays to broadcast local networks have gotten steeper.
“We pay our network partners millions of dollars for entertainment programming and live sports,” Dennis Thatcher, president of Mission Networks, said in a statement. “The cost to do these things has, understandably, gone up significantly — especially live sports rights — and these costs are passed along to us, the station owner.”
DirecTV’s suit claims that the coordinated efforts of Nexstar, Mission, and White Knight have led to blackouts in 25 TV markets, including Amarillo, Tyler, Abilene, Midland-Odessa, and Lubbock, according to Audacy.
“Mission and White Knight are now unlawfully coordinating with Nexstar to raise prices and extract supracompetitive retransmission consent fees from DIRECTV in ‘overlap’ DMAs [designated market areas] — those markets where both Nexstar and either Mission or White Knight each own a Big-4 station,” said DirecTV in its statement.
“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.”
A Nexstar spokesperson claimed the lawsuit was without merit.
“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,” the spokesperson told Radio + Television Business Report.
DirecTV’s suit comes amid a considerable shakeup in the local broadcasting space. Diamond Sports Group, — which operates under Bally Sports, the largest local sports channel owner in the U.S. — filed for Chapter 11 bankruptcy on Tuesday, according to Bloomberg.