Currently, AT&T has Nexstar and CBS-owned locals blacked out on DIRECTV, DIRECTV NOW (renamed AT&T TV NOW), and U-Verse TV. Soon you may have to add Sinclair-owned locals to that list as Sinclair, in their earnings call yesterday, warned that their contract is up sometime this quarter.
AT&T reportedly has been pushing back on the fees for local stations. According to AT&T, Nexstar, for example, recently asked for a 100% jump in fees paid by AT&T for Nexstar-owned locals.
Here is what AT&T’s CEO Randall Stephenson said about the recent blackouts during AT&T’s earnings call:
I’ll take the carriage disputes that are going on with CBS and Nexstar first, and I’ll hand it to John [and] let him reconcile the subscriber numbers for you. As everybody probably knows, CBS has pulled their signal off DIRECTV as has Nexstar. And there are two very different situations. On CBS, it’s kind of an interesting situation. The bid asked candidly is not that wide, but it’s kind of an interesting dynamic but then we sent, that was a reasonable fair offer over 5 days ago, and that’s been Crickets. We haven’t heard anything, had we had a response to the offer. When you’re as close as we are, we find it a little interesting that we’re still sitting here dark and not having interaction with CBS. I’m guessing they’re probably distracted with other negotiations right now, but I don’t know. Nexstar, it’s a very different situation. Nexstar, as you know basically, their product is broadcast, the four big broadcast stations pre over the year content, I might point out, and their opening bid in the negotiations like 100% increase. Not only was it a 100% increase, but the assets that they’re trying to acquire, but they don’t own yet, they were asking for a rather significant increase in assets they don’t own. So it began with kind of a nonstarter. They pulled their signal and gone dark. Now the spread is they’re asking for a 50% increase on broadcast channels that again are pre-over the year. And so that one may take longer but we’ll just have to be resolute on this one. We’re not just going to impose those kind of price increases on our customers. And interestingly enough, unlike other times where we have gone through these types of blackouts where companies have pulled their signal, our customers and world of streaming other ways to access this content, and so there’s other technologies. These technologies may even flow right into the programming guide in our DIRECTV lineup and some customers are at a pretty significant rate finding other ways of getting through the content. So that one could take a while. CBS, I’m optimistic, but hopefully we’re just get them back to the table and get this closed.
We will have to see if Sinclair and AT&T can strike a deal before its current contract comes to an end sometime before the end of September.
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