The U.S. Department of Justice sued AT&T over DirecTV’s refusal to carry the Dodgers’ channel. The DOJ suit alleges that DirecTV colluded with cable companies Cox, Charter and AT&T to deny carriage to SportsNet LA. Essentially, the 57-page complaint accuses DirecTV Chief Content Officer Dan York of making sure that Cox, Charter and AT&T hold firm in not carrying the channel, which was being sold by Time Warner Cable. According to the complaint: “These unlawful exchanges were intended to reduce each rival’s fear that competitors would carry the Dodgers Channel, thereby providing DirecTV and its competitors artificially enhanced bargaining leverage to force TWC to accept their terms.”
AT&T released a statement saying that it was prepared to argue its case in court. “We respect the DOJ’s important role in protecting consumers, but in this case, which occurred before AT&T’s acquisition of DirecTV, we see the facts differently. The reason why no other major TV provider chose to carry this content was that no one wanted to force all of their customers to pay the inflated prices that Time Warner Cable was demanding for a channel devoted solely to LA Dodgers baseball. We make our carriage decisions independently, legally and only after thorough negotiations with the content owner. We look forward to presenting these facts in court.”
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The complaint contains interesting information on a previous carriage deal DirecTV signed for the Lakers’ channel, Spectrum SportsNet. DirecTV waited until a week into the '12 NBA regular season to sign a deal. The complaint: “Most of (DirecTV’s) competing video distributors in the LA area had launched the Lakers Channel, and it was losing hundreds of customers per week to them. Consequently, on Nov. 14, 2012, ten days after Cox agreed to carry the Lakers Channel, DirecTV agreed to pay TWC’s initial asking price, even though DirecTV’s internal analyses estimated that carriage of the Lakers Channel was worth significantly less. DirecTV agreed to pay almost 50% more than its internal financial analysis suggested.”
