Entertainment Industry

Category: Tribune

Tribune and DirecTV make a deal

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Tribune Co. television stations, including KTLA-TV Los Angeles, are coming back to satellite broadcaster DirecTV.

After a very public feud, DirecTV reached a five-year agreement late Wednesday to pay Tribune to carry its 23 local television stations around the country and its national cable channel WGN America. With more than 19 million subscribers, DirecTV is the second-largest pay-TV operator behind Comcast Corp. It has a market share of around 20% in Los Angeles.

KTLA returned to the air shortly before 6 p.m.

“We are extremely pleased to have reached an agreement with DirecTV and to return our valuable news, entertainment and sports programming to DirecTV subscribers,” said Nils Larsen, Tribune Broadcasting president. “On behalf of Tribune Broadcasting, I want to thank viewers across all of our markets for their support, understanding and patience during the negotiating process — we truly regret the service interruptions of the last several days.”

DirecTV Executive Vice President Derek Chang said the satellite broadcaster was pleased that "Tribune and their creditors now recognize that all DirecTV wanted from day one was to pay fair market rates for their channels .... we are very happy to close the deal and put this behind us.”

Tribune, which is also the parent of the Los Angeles Times, had pulled its stations from DirecTV last weekend. The next few days saw both companies take public shots at each other. DirecTV accused Tribune of reneging on an agreed-upon deal, which Tribune denied. Then DirecTV filed a complaint against Tribune with the Federal Communications Commission, charging that creditors of bankrupt Tribune, not its management, are calling the shots for the stations.

That the fight was resolved on the opening day of the baseball season is probably not a coincidence. Many of Tribune's stations, including WGN-TV Chicago and WPHL-TV Philadelphia, have rights to local teams, and sports fans can be very vocal when denied their home team's games.

Disputes between programmers and distributors over fees have become very common over the past few years, although it is still rare that channels are pulled down. Broadcasters such as Tribune are eager to collect so-called retransmission consent fees from cable and satellite operators.

While distributors initially resisted paying broadcasters to carry their signals, it has become an accepted practice. In this case, DirecTV and Tribune were haggling over price. Terms of the agreement were not disclosed.

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Tribune and DirecTV still feuding

Tribune tells DirecTV to take signals down

-- Joe Flint

Photo: DirecTV dish. Credit: Associated Press

DirecTV files FCC complaint against Tribune

DirecTV and Tribune are fighting
Satellite broadcaster DirecTV is making a federal case out of its fight with Tribune Co.

In a complaint filed at the Federal Communications Commission, DirecTV accused Tribune of reneging on a deal that would have kept the latter's television stations on the satellite service. The filing also charges that the bankrupt Tribune's creditors, and not its management, are calling the shots for the stations, even though they do not yet hold the actual licenses.

"In another case of runaway Wall Street greed, some of America’s wealthiest hedge funds and investment banks, including Oaktree Partners, Angelo Gordon, JPMorgan Chase, Bank of America and Citibank forced Tribune’s senior management to renege on an agreement that would have kept DirecTV customers connected to their local programming," DirecTV said in a statement. "Their actions represent a brazen attempt to extract yet another bailout on the backs of innocent viewers."

Tribune fired back that DirecTV's filing was just another negotiating ploy.

"Claims of 'bad faith' and 'outrageous conduct' are nothing more than negotiating tactics in an attempt to unfairly disadvantage Tribune from receiving fair-market compensation from DirecTV for carriage of Tribune’s local television stations and WGN America," said a Tribune spokesman. 

The complaint, filed Monday, is in response to Tribune's decision to pull its 23 television stations -- including KTLA-TV Los Angeles -- and its national cable channel WGN America from DirecTV. Tribune is also the parent of the Los Angeles Times. Tribune CEO Eddy Hartenstein, who is also the Los Angeles Times' publisher, is a former CEO of DirecTV.

DirecTV said that last Thursday, two days before Saturday night's deadline, it had an agreement in principle with Tribune that would have kept the stations on its service. On Friday, Tribune told DirecTV that was not the case, DirecTV's filing said. 

The reason for the about-face, according to DirecTV, was that Tribune management was overruled by the hedge fund and investment bank creditors who hold the bankrupt company's debt.

DirecTV believes it has a smoking gun in the form of email and phone conversations between Derek Chang, its executive vice president, and Nils Larsen, the head of Tribune's television station group. In the filing, DirecTV's Chang said he asked Larsen why their agreed-upon deal was now no good, and that Larsen replied that "his constituents" had overruled Tribune management.

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Consumers left in dark during fight between Tribune and DirecTV

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Consumers are caught in the middle of a fight between media giants.

This time, it's Tribune Co. and satellite broadcaster DirecTV who are squabbling. The debate is over fees that Tribune, the parent of the Los Angeles Times, wants DirecTV to pay to carry its local television stations, including KTLA-TV Channel 5 in Los Angeles.

Early Sunday, Tribune signals around the country started coming off of DirecTV's satellite service. The first channels to vanish were WPIX-TV in New York, WPHL-TV in Philadelphia and WDCW-TV in Washington. Then the rest of Tribune's 23 stations, including KTLA-TV, went dark on DirecTV. Also off of DirecTV is Tribune's national cable channel, WGN America.

Battles over fees between programmers and distributors have become commonplace in recent years. Typically, agreements are reached without consumers losing channels. But on occasion, channels are pulled off while the two sides negotiate. In the fall of 2010, Fox pulled its TV stations off of Cablevision Systems, a large East Coast cable operator, for more than two weeks until a new contract was signed.

Over the weekend it looked like a channel blackout would be averted. DirecTV said it was willing to accept Tribune's terms to pay for its local stations, leading to hopes that the signals would stay on the air.

However, Tribune quickly responded that, in contrast to what DirecTV had said, the two sides were far apart on an agreement. The talks are now stalled, said a spokesman for Tribune. While Tribune was encouraging its viewers to complain to DirecTV, the satellite broadcaster told its subscribers that "there is no need for you to do anything at this time as these matters are typically resolved in a short amount of time."

Bitterness is apparent on both sides. DirecTV said Tribune had reneged on a "handshake deal" and was behaving in "bad faith." DirecTV even suggested that Tribune's own financial woes (the company is in the process of trying to emerge from bankruptcy) was leading it to make short-sighted decisions.

Tribune Broadcasting President Nils Larsen countered that "DirecTV is refusing to offer a fair deal." Tribune also accused DirecTV of trying to mislead consumers with regard to the status of talks. "There has been no agreement of any kind, handshake or otherwise," the company said.

On Sunday, DirecTV said it remains "willing and available at a moment’s notice to resolve this as soon as possible" and implored Tribune to "do the right thing for their viewers and our customers and put the channels back up while we continue to negotiate."

Tribune President and Chief Executive Eddy Hartenstein, who is also publisher of the Los Angeles Times, is a former CEO of DirecTV.

With over 19 million subscribers around the country, DirecTV is the nation's second-largest pay-television provider, behind Comcast Corp. By removing its signals from DirecTV, Tribune is risking a hit to its ratings and a potential loss of advertising revenue. Conversely, DirecTV could face a backlash from subscribers angry at being deprived of a channel and being used as pawns in a fight over money.

Until the feud is resolved, subscribers to DirecTV will lose lots of sports programming that is carried by Tribune's stations. For example, WGN-TV carries the Cubs and White Sox. WPIX-TV has broadcast rights to the New York Mets and WPHL-TV carries the Phillies.

Most of Tribune's stations, including KTLA, are affiliates of the CW Network, whose popular shows include "The Vampire Diaries" and "Gossip Girl." Tribune also owns affiliates of other networks, including Fox and ABC.

As is often the case these days, many took to the social networking site Twitter to voice their frustrations with both companies. Some were a little sarcastic. 

"Oh no, DirecTV is denying viewers of KTLA who want to watch 'The Healing Power of Juicing,' " cracked one Twitter user who was making fun of infomercials that run on KTLA during late night and early morning hours. 

Others were lamenting the loss of KTLA. "That was the one news station I could actually watch and stand," tweeted one consumer.

RELATED:

Tribune and DirecTV still feuding

Tribune tells DirecTV to take signals down

-- Joe Flint

Photo: DirecTV dishes outside of an apartment building. Credit: Associated Press.

Tribune tells DirecTV to take stations down

Tribune tells DirecTV to take stations down

Unable to reach a new agreement, Tribune Co. told DirecTV to pull the signals of its 23 television stations off the satellite broadcaster, the media company said late Saturday night.

DirecTV subscribers to Tribune stations such as WPIX-TV in New York and in other East Coast locales were the first markets expected to lose their channels. In Los Angeles, KTLA-TV should be off of DirecTV after midnight unless a deal or some sort of a temporary extension is reached. However, a last-minute breakthrough seems very unlikely.

Because Tribune's KTLA is the local affiliate of the CW in Los Angeles, this will mean DirecTV subscribers could lose access to such shows as  “America’s Next Top Model,” “Gossip Girl,” and "Vampire Diaries.”

The two sides spent the last few days trying to reach an agreement while simultaneously criticizing each other publicly. Early Saturday, DirecTV said it had agreed to terms offered by Tribune to carry its television stations, leading many to assume that the two sides had settled their differences.

However, Tribune soon fired back that DirecTV was misleading people and that there was no agreement in place. Tribune is the parent of the Los Angeles Times. It president and CEO, Eddy Hartenstein, is a former chief executive of DirecTV.

“This situation is extremely unfortunate,” said Nils Larsen, Tribune Broadcasting president. “We don’t want anyone to lose the valuable programming we provide, but we simply cannot get fair compensation from DirecTV and we cannot allow DirecTV to continue taking advantage of us.”

At issue are fees that Tribune wants DirecTV to pay in return for carrying its signals. Tribune says that DirecTV has never paid for the Tribune programming it rebroadcasts over its system, though, the media company alleges, DirecTV pays other broadcasters for the same kind of programming.

DirecTV has indicated it is willing to pay to carry Tribune's television stations, but finding common ground on a price tag has proved difficult.

The sticking point, according to people familiar with the situation, are terms for WGN America, the Tribune-owned national cable channel that carries Chicago Cubs and White Sox baseball as well as Chicago Bulls basketball.

With over 19 million subscribers, DirecTV is the nation's second-largest pay-television provider after Comcast Corp., the Philadelphia-based cable company that has almost 24 million subscribers. DirecTV has a market share of just over 20% in Los Angeles.

Disputes between broadcasters and pay television distributors have become commonplace in recent years. Typically deals or extensions are reached without viewers losing channels. However, on occassion a channel does come off when the two sides cannot agree.

Most of Tribune's stations, including KTLA, are affiliated with the CW, a broadcast network co-owned by CBS Corp. and Time Warner Inc. The CW appeals primarily to teens and young adults with shows such as "Gossip Girl" and "The Vampire Diaries." Tribune also owns a handful of Fox affiliates.

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Tribune and DirecTV still feuding

-- Joe Flint

Photo: In this 2009 file photo, a DirecTV satellite dish in a residential area adjoining downtown Jackson, Miss., is shown. Credit: Rogelio V. Solis / Associated Press

Tribune threatens to pull stations from DirecTV

Tribune's Nils Larsen
Tribune Co., owner of 23 television stations across the country including KTLA-TV Los Angeles, is threatening to pull its channels from satellite broadcaster DirecTV.

At issue are fees that Tribune, which is also the parent of the Los Angeles Times, wants DirecTV to pay in return for carrying its local stations.

Such fees are known in the television industry as retransmission consent agreements. As broadcasters have faced greater competition for advertising revenue from cable television, most have sought to establish a second revenue stream through retransmission consent fees. Cable networks already have duel revenue streams.

Tribune's current agreement with DirecTV expires at midnight March 31, and the company said it wanted to start alerting viewers now of a possible disruption of service.

“Despite our best efforts, DirecTV is refusing to offer a fair deal and we remain far apart in negotiations,” said Tribune Broadcasting President Nils Larsen.

With more than 19 million subscribers, DirecTV is the nation's second-largest pay TV distributor, behind Comcast. In a statement, DirecTV said, "We anticipate that Tribune will honor its 165-year history of serving the public interest and allow the stations to remain on as we continue to negotiate." The company added that it has "no problem compensating Tribune fairly."

Tribune Co. declined to comment on how much it is seeking from DirecTV. The company did say in its statement that DirecTV has never paid to carry its local stations in the past.

However, DirecTV does pay to carry WGN America, the Tribune-owned national cable channel that carries Chicago Cubs and White Sox baseball as well as Chicago Bulls basketball. A person familiar with the matter not authorized to speak publicly about negotiations said previous deals for WGN America have also included Tribune's local stations.

Feuds over programming fees have become commonplace in the media industry. Usually a deal is reached before a contract expires, or the two sides agree to keep a channel available to subscribers while they continue to negotiate. On some occasions, though, subscribers lose a channel while the two sides try to hammer out an accord. In 2010, ABC pulled its signal from Cablevision, depriving viewers of a portion of the Oscar awards. 

Most of Tribune's stations, including KTLA, are affiliated with the CW, a broadcast network co-owned by CBS Corp. and Time Warner Inc. The CW appeals primarily to teens and young adults with shows such as "Gossip Girl" and "The Vampire Diaries." Tribune also owns a handful of Fox affiliates.

The 1992 Cable Act gave broadcasters the right to seek retransmission consent fees. At that time, most chose instead to leverage that right into new cable channels. News Corp., for example, launched FX and persuaded cable and satellite distributors to pay for that, and carry its local TV stations as part of the deal. NBC took a similar approach for the channel that ultimately became MSNBC.

Now broadcasters typically seek cash from distributors for their television stations. Typically, local TV stations ask for as little as a few cents per month, per subscriber up to as much as $1 dollar per month, per subscriber.

Tribune President and Chief Executive Eddy Hartenstein is a former CEO of DirecTV.

RELATED:

News Corp. and DirecTV reach new deal

Tribune Co. is  part of lawsuit against Aereo

Time Warner Cable and DirecTV team up to lobby FCC

-- Joe Flint

Photo: Tribune's Nils Larsen. Credit: Tribune.

For the record: A previous version of this post stated Tribune owned 16 stations. It owns 23 stations.

Los Angeles TV stations rake in the campaign cash

Most of the votes have yet to be cast, but one group already has emerged as a big winner in next Tuesday's election: Los Angeles television stations. 

Well Fargo Securities' media analyst Marci Ryvicker estimates that overall political spending this year could be as much as $3.3 billion -- an 11% jump over 2008. Television stations around the country are expected to collect two thirds of that total -- more than any other medium.

Los Angeles television stations are particularly well positioned. Ryvicker found that LA stations had collected $105 million by the third week of September -- three times as much as New York stations. And that was before the candidates' spending sprees kicked into high gear.  By the time election season is over, LA stations could take in as much as $150 million in political money.

“We could reach record spending levels here in Southern California,” said Sue Johenning, who is in charge of local advertising for the ad-buying firm Initiative. “It’s clearly the two big statewide races and all of these various committees. That’s making a difference.”

Meg Whitman, a Republican, has led the charge. The former Ebay chief has poured more than $140 million of her own billion-dollar wealth into her campaign for California governor. The floodgates opened after Labor Day when Democrat Jerry Brown and his backers began promoting his gubernatorial bid. That’s also when the race for U.S. Senate between incumbent Democrat Barbara Boxer and Republican Carly Fiorina intensified.

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