Bloomberg News

Tribune Says Stations Pulled From DirecTV U.S. Markets

April 01, 2012

Tribune Co. (TRB:US) said some of its television stations went off the air for DirecTV (DTV:US) subscribers in 19 U.S. markets, including Chicago, New York, Washington and Philadelphia, after a contract lapsed at midnight.

The blacked-out stations include WPIX-TV in New York, WPHL- TV in Philadelphia, WGN in Chicago and WDCW-TV in Washington. DirecTV said it has 19.9 million subscribers in the U.S. Tribune has set up a website for DirecTV viewers affected by the shutdown.

Negotiations have gone on for more than two months on an agreement to allow DirecTV to carry Tribune’s 23 local broadcast stations in various markets. In those markets, Tribune owns either the local Fox or CW affiliates. The lack of an accord leaves viewers unable to see shows that include “American Idol,” Major League Baseball broadcasts, “America’s Next Top Model” and “Gossip Girl.”

“DirecTV has never compensated Tribune for the rebroadcast of its television stations and Tribune is asking for an agreement that is similar to those that DirecTV already has in place with hundreds of other broadcasters and program providers,” Tribune said in a statement late yesterday.

“We’re fully prepared to pay Tribune fairly for their stations,” Darris Gringeri, a DirecTV spokesman, said today in an e-mail. “This issue is that they are asking for a price that is far above market value and that’s not fair to our customers.”

‘Puzzled’

Yesterday, DirecTV said the two sides reached a “handshake deal” on March 29. Tribune said later in the day that that statement by DirecTV left them “puzzled,” while denying an accord was reached.

Tribune spokesman Gary Weitman, asked yesterday whether the two sides were still talking, said in a telephone interview, “I don’t want to comment upon or characterize the negotiation process.”

Michael McCormack, an analyst at Nomura Securities International Inc. in New York, said in February, at the time of DirecTV’s fourth-quarter earnings release, that programming costs will be exacerbated when it negotiates new contracts with CBS Corp. and Discovery Communications Inc. this year.

Tribune, the Chicago-based owner of the Los Angeles Times and the Chicago Tribune newspapers, filed for bankruptcy in December 2008, one year after a leveraged buyout led by real- estate billionaire Sam Zell.

Since then, the company and hedge funds holding Tribune’s senior debt have fought for approval of a plan to divide ownership among the lenders that financed the $8.3 billion buyout.

To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net

To contact the editor responsible for this story: Sylvia Wier at swier@bloomberg.net


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