On March 14, 2023, direct broadcast satellite company DirecTV “took a stand for its customers” by mounting a legal challenge against what it calls “a conspiracy” concocted by Nexstar Media Group and two shared services partners to illegally increase content costs for free over-the-air TV.
Just over one year later, a U.S. District Court judge in New York has ruled in favor of Nexstar, dismissing DirecTV’s assertions that the broadcast TV station owner engaged in actions in violation of U.S. antitrust laws.
The decision from U.S. District Judge P. Kevin Castel on Wednesday (3/20) effectively grants Nexstar’s motion to dismiss claims from DirecTV that it engaged in antitrust activities when it failed to reach a retransmission consent accord with the DBS provider in 2022.
The retrans agreement also involves stations owned by Mission Broadcasting, which is independently owned but sees its operations handled by Nexstar, and White Knight Broadcasting, also independently owned and enjoying an arrangement with Nexstar that allows that company to handle its carriage negotiations.
With retransmission consent negotiations growing ever testier between DirecTV and broadcast TV station owners, neither DirecTV nor Nexstar were willing to accept terms discussed to bring a fresh agreement to fruition before the old one expired. That resulted in a “blackout,” as MVPDs by law may not retransmit a broadcast signal without consent.
DirecTV asserted to the court that it did not renew its retrans accord with Nexstar because it considered the prices demanded to be unreasonable. This resulted in the “blackout” of Nexstar, White Knight and Mission stations. Subsequently, “thousands of customers” said goodbye to DirecTV and terminated their subscriptions — a statement that could prove intriguing as DirecTV this week debuted an opt-out feature for consumers who don’t wish to pay for receiving their local broadcast channels.
Key to the DirecTV lawsuit was the contention that White Knight, Mission and Nexstar conspired in a price-fixing scheme, and that it suffered losses as a result of their actions. Thus, DirecTV believes this was in violation of federal anti-trust laws.
Castel said no.
“Here, Plaintiff’s injury—lost profits resulting from the blackouts—does not flow from that which makes Defendants’ acts unlawful because DIRECTV does not allege that it paid anticompetitive rates but instead made the unilateral decision to abandon [retransmission consent agreement] negotiations,” Castel ruled. “Its losses therefore flow from its own choice to exit the market.”
On Thursday morning (3/21), a DirecTV spokesman responded to the court ruling by noting the company is “actively considering an appeal.” Regarding the decision, DirecTV says, “This ruling sets a dangerous precedent that a victim of price-fixing needs to pay the inflated price before it can make a claim in court.”
Mission is the owner of 29 full-power TV stations across 26 markets; it recently agreed to purchase WADL-TV in Detroit. All of its television stations are operated by Nexstar via shared services agreements, and WADL will follow suit. Mission is led by Nancie Smith.
White Knight is based in Lafayette, La., and dates to 1995. It is the owner of WVLA-TV in Baton Rouge and KFXK-TV and KFXL-LP in the Tyler-Longview-Lufkin, Tex., DMA.
Serving as Nexstar Media Group’s lead legal counsel in the case is Lynn Pinker Hurst & Schwegmann LLP’s Chris Schwegmann.
