AT&T, Nexstar Trade Accusations as Contract Talks Loom

AT&T, Nexstar Trade Accusations as Contract Talks Loom

As a contract standoff keeping Nexstar Media Group stations off the cable and satellite TV lineups of AT&T and DirecTV stretched into its second week, top officials for both companies scheduled negotiations starting Saturday in El Segundo, California.

The dispute over what AT&T will pay for programming from Nexstar, a Texas-based chain of 120 stations including KARK in Little Rock and KNWA in northwest Arkansas, left those stations dark on AT&T's U-verse cable system and on the DirecTV satellite service, which is owned by AT&T. Nexstar's stations in 97 U.S. markets went dark on AT&T at 11:59 p.m. July 3.

The face-to-face negotiations had been scheduled for Friday but were pushed back a day, according to officials at AT&T, which pushed back on some Nexstar claims about the dispute. In a statement, it particularly noted Nexstar's characterization of a 30-day extension it said it offered to let Nexstar programming remain on AT&T while a new deal is negotiated.

The offer was rife with unacceptable conditions, the communications giant said, not the least being that the distributor would have to agree to its rates being retroactively applied.

"We have spent the past week offering Nexstar new rates in multiple good-faith proposals," the AT&T statement said. "Nexstar claims that it offered us an unconditional 30-day extension. That is not true. Nexstar's extension was specifically condition on its rates being retroactively applied, with an expectation that we and our customers would pay its unprecedented proposed fee increase."

For its part, Nexstar said it was negotiating in good faith while AT&T was presenting misinformation. "The misinformation campaign began when AT&T indicated that 'Nexstar has pulled 120 of its local broadcast stations,'" a Nexstar news release said. "Nexstar did not pull its stations or ask for their removal from AT&T's DirecTV, U-verse or DirecTV Now platforms. Rather, Nexstar's offer for a 30-day extension would have allowed consumers in the affected markets to continue viewing their favorite network shows, special events, sports, local news and other programming while the parties continue negotiations."

The release said that, after acquiring DirecTV and then Time Warner last year, "AT&T appears intent on using its new market power to prioritize its own content at the expense of consumers, and insisting on unreasonable terms that are inconsistent with the market."

It compared stock market capitalization, noting that AT&T is "approximately 50 times larger than Nexstar."

In its statement, AT&T hinted that Nexstar is demanding that any deal cover properties it doesn't own yet. Those would be stations it is pursuing as part of a $6.4 billion acquisition of Tribune Media. In December, Nexstar reached an agreement to purchase Tribune, of Chicago, which owns 42 stations and WGN America, the cable channel.

The dispute comes down to money AT&T would pay for retransmitting Nexstar's content. AT&T claims that even as Nexstar's viewership has dropped over recent years, it is demanding a doubling of its retransmission rates. AT&T also says that Nexstar, based in Irving, Texas, has "slow-rolled" negotiations, a charge the Texas company denied.

AT&T said that even if it were to accept the 30-day extension, that grace period would end before the start of the college football and NFL season, "which would give the broadcaster even more leverage in a blackout if a deal wasn't reached during the extension."

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