EL SEGUNDO, Calif.—DirecTV has won an appeal to reinstate a federal lawsuit accusing Nexstar Media Group, Mission Broadcasting, and White Knight Broadcasting of conspiring to manipulate and increase prices of retransmission-consent fees.
The suit rose from a retransmission dispute between pay TV provider DirecTV and station owners Mission and White Knight, which resulted in the October 2022 blackout of 30 stations on DirecTV. The blackout, ongoing after more than three years, resulted in blackouts of Big-4 stations (ABC, CBS, NBC or Fox) in 25 DMAs.
On March 14, 2023, DirecTV filed suit in U.S. District Court in Manhattan alleging Nexstar, Mission and White Knight violated federal antitrust law by conspiring to fix the prices of retransmission consent fees in markets where both Nexstar and either Mission or White Knight own a Big Four station.
DirecTV alleged that Mission and White Knight shared a common negotiator who was, in fact, an agent of Nexstar. It also claimed that this negotiator improperly shared confidential rates and other financial information with Nexstar, and that the three defendants coordinated their respective blackout dates and media responses.
However, in March of 2024, the federal district court dismissed the case on the grounds that DirecTV lacked standing to assert antitrust claims against the defendants under the Sherman Antitrust Act.
On Dec. 16, the 2nd U.S. Circuit Court of Appeals rejected those arguments, affirming DirecTV has standing to sue under antitrust laws and may prosecute its claims against Nexstar and its sidecars.
More specifically, the appeals court rejected the defendants’ arguments that the damage DirecTV has suffered from subscriber loss is too indirect or speculative, finding “the parties had a longstanding history of reaching agreements every three years” and because of this baseline, DirecTV “can identify concrete losses of subscribers and profits during the blackout periods that occurred when those RCAs terminated.”
The court also stressed that horizontal price-fixing “directly interfer[es] with the free play of market forces” and its victims are not limited to those who pay inflated prices.
“Lost profits resulting from a reduction in output represent a cognizable antitrust injury, and DirecTV plausibly alleges that its lost profits flowed directly from the output-reducing effects of the alleged price-fixing conspiracy,” the court concluded.
The ruling means that the case will now resume in U.S. District Court.
“We are pleased that the 2nd Circuit has held that DirecTV has standing in this case, and we plan to proceed with our claim that Nexstar, White Knight, and Mission have abused their ‘sidecar’ relationship in violation of FCC regulations and long-standing competition laws,” DirecTV Chief Legal Officer Michael Hartman said. “Nexstar’s sidecars have made a mockery of existing broadcast ownership rules, resulting in ever-increasing retransmission consent fees at consumers’ expense.”
TV Tech has reached out to Nexstar for comment.
