DirecTV recently informed a federal court that the reason why they pulled out from signing a carriage deal with Time Warner Cable for SportsNet LA channel is the pricing of the Los Angeles Dodgers baseball. The cable service provider, DirecTV, along with their parent company, AT&T, informed that the Justice Department has not filed a case for either anti-competitive effects or restraint of trade in their suit against the satellite TV provider over the carriage for SportsNet LA.
SportsNet LA is managed by Charter Communications and is currently owned by the Dodgers. Charter acquired a long-term deal with the baseball team in last May. Reports indicate that TWC was charging too much for SportsNet LA and DirecTV was not ready to pay this amount.
Many analysts still have no clue on how the Trump Administration’s Justice Department will pursue this case. President Trump had earlier stated that he is planning to block AT&T’s acquisition of Time Warner (which is a separate company). However, in a recent statement, AT&T Chairman and CEO, Randall Stephenson focused only on the impact of regulations and about creating jobs.
DirecTV remains hopeful that the court will dismiss the lawsuit “as a matter of law,” and “with prejudice.” The Justice Department charged DirecTV a few months ago for being the “ringleader” in a series of “unlawful information exchanges” with Charter Communications (before Charter acquired TWC), Cox Communications, and AT&T (before AT&T acquired DirecTV) during the negotiations of the companies for the rights to carry SportsNet LA.
DirecTV informed the court that the filed complaint was only on the basis of generalized allegations of information sharing. DirecTV also noted that there is “no allegation of any multilateral agreement of communication on the negotiations, or anything else for that matter. No allegation that DirecTV’s negotiations were not in good faith, no allegation of improper communications with Dish or Verizon, who still don’t carry the channel, and no allegation that any of the distributors who allegedly would have carried the channel save for the communications had market power over TWC.”
“There is nothing in the complaint that contradicts the obvious alternative explanation that DirecTV and other distributors independently analyzed the value of the Dodgers Channel to their subscribers, tried to negotiate reasonable terms with TWC in good faith, and reached the same fundamental conclusion that TWC’s price demands were too high,” DirecTV officials added.