Scripps-owned broadcast stations went dark for DirecTV customers across the country on Sunday, leaving countless viewers in a lurch as major sporting events like the NBA Finals and Stanley Cup Finals are set to begin. Scripps is one of the largest owners of ABC affiliates in the country, operating stations in major markets like Phoenix, Denver, Detroit, Baltimore, Tampa, Las Vegas, Cleveland, Cincinnati, and Buffalo. And as ABC prepares to host both the NBA’s and NHL’s championship series on its network this week, DirecTV subscribers in those markets (and more) will find themselves searching for alternative ways to watch.
The blackout comes just one month after Scripps settled another carriage dispute with Comcast that lasted over a month. It’s the first time in Scripps’ history that the company has faced two major blackout-inducing distribution battles in such short order; Scripps has historically settled these negotiations without issue.
But something about Scripps’ programming has changed. The company has begun dabbling in live local sports rights, striking deals with five NHL clubs and one NBA team to carry local game broadcasts on free, over-the-air networks. It is natural to assume Scripps would attempt to leverage these deals to command higher retransmission fees from distributors like Comcast and DirecTV. After all, regional sports networks employed that same playbook for years.
A source tells Awful Announcing that local sports was likely a significant part of the hangup between Scripps and Comcast earlier this year, as Comcast continues its efforts to divest from local sports by placing regional sports networks into premium tiers. That, however, is not the case with DirecTV, the source said.
In a fiery interview with Awful Announcing about the dispute, Scripps CEO Adam Symson confirmed that local sports is not a point of contention with DirecTV, calling any effort by the pay-TV distributor to suggest otherwise a “false flag.” Instead, Symson pointed towards good old-fashioned corporate greed as a driving force in the dispute.
“They’re run by private equity. They have MBAs running the numbers. I don’t really think they care about the work we do in the local communities and that local people actually rely on, whether it’s local news or local sports,” Symson said. “Rather than rationalize their lineups and end the carriage and payment for a bunch of zombie channels owned by bigger multibillion-dollar conglomerates that have leverage over them, they are screwing with the consumer and what the consumer actually wants to watch, which is broadcast television, local journalism, and local sports.”
Still, DirecTV is seemingly happy to suggest that it is, in fact, local sports rights that Scripps is trying to leverage to up its retransmission fees.
“Broadcasters like Scripps continue to accumulate exclusive control over local sports teams or other civic content, only to then deny viewers access at times of peak demand,” DirecTV said in a statement. “This enables stations to leverage municipal pride and fan loyalties to demand higher guaranteed retransmission rates from distributors like DirecTV to carry their free, over-the-air stations, despite rising regulatory and public concern over escalating television and other day-to-day costs, and amid the growing availability of multiple streaming alternatives.”
“Absolutely, no. We are not using local sports as leverage,” Symson reiterated to Awful Announcing.
To be sure, Scripps has higher programming costs associated with its push into live sports, which could be motivating its more dug-in position to secure better rates, even if sports rights are not a direct sticking point in negotiations. After all, Scripps needs to do what’s best for the health of its business, and if costs go up, revenues need to as well.
While acknowledging local sports rights weren’t a sticking point in current negotiations, Symson did go out of his way to mention that DirecTV stands to profit from local sports rights shifting off regional sports networks and onto local broadcast affiliates because the retransmission fees DirecTV pays to local broadcast affiliates are cheaper than the carriage fees paid to traditional regional sports networks.
“Whatever [DirecTV] w[as] paying to the RSNs, I 100% know they have booked that as savings and put that in the pockets of their private equity owners,” Symson claimed.
Of course, those “savings” are only realized if the shift of local sports telecasts from regional sports networks to over-the-air broadcast does not accelerate DirecTV’s subscription declines. In fact, DirecTV has been active in lobbying against this shift to protect the pay-TV bundle.
Asked about DirecTV’s suggestion that Scripps is demanding “the highest rates” ever seen from a free-to-air broadcaster, Symson characterized Scripps’ asking price as “totally market rate,” saying DirecTV’s statement is “completely false.”
“We have never had industry-leading rates … and I would argue that [DirecTV’s] being very disingenuous in describing what we’re seeking as ‘the largest rate increases they’ve ever been asked for.’ It’s just nonsense,” Symson argued.
When contacted about Symson’s remarks prior to publication, a DirecTV spokesperson declined to respond directly and pointed Awful Announcing to the company’s written statement.
At another point in his conversation with Awful Announcing, Symson suggested DirecTV’s negotiation tactics amount to anti-competitive behavior.
“I feel to some extent they are trying to advantage themselves, show that they are best positioned in the event they participate in M&A. And they are trying to disadvantage us in the event we grow our portfolio of stations. And that is anti-competitive, antitrust behavior,” the Scripps CEO suggested.
The question now is what all this bluster means for consumers. While there’s clearly some impassioned feelings from Symson, if the negotiation is truly primarily about price, and not something more philosophical like whether distributors should submit to higher retransmission fees when local sports rights move to over-the-air broadcast networks, then a resolution could come sooner rather than later. With the NBA Finals and Stanley Cup Final about to get started, and DirecTV subscribers at risk of missing the action, this week should be quite telling for how long this blackout may drag on.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.