DirecTV loses access to Tribune local stations, files FCC complaint

By Caroline Salls

Pittsburgh, April 2 - DirecTV filed a complaint with the Federal Communications Commission against Tribune after losing access to Tribune Broadcasting Co.'s 23 local stations in 19 cities since midnight Saturday, according to a DirecTV news release.

DirecTV said it is seeking an immediate intervention and expedited ruling against Tribune for failing to negotiate in good faith and bringing into question whether broadcast licenses have been prematurely and inappropriately transferred to bankruptcy creditors.

"In another case of runaway Wall Street greed, some of America's wealthiest hedge funds and investment banks, including Oaktree Partners, Angelo Gordon, JP Morgan 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," the release said.

"Their actions represent a brazen attempt to extract yet another bailout on the backs of innocent viewers."

DirecTV said the complaint specifies that Tribune's most senior executives claimed to have the authority to negotiate a retransmission consent agreement and, in fact, achieved an agreement in principle with DirecTV on March 29.

However, DirecTV said the Tribune executives rescinded the agreement the following day, acknowledging that bankrupt Tribune's hedge fund and investment bank creditors overruled senior management, exercising authority over Tribune's broadcast licenses and operations the FCC has yet to grant.

Authority confusion

"DirecTV negotiated with Tribune for months, only learning on the very eve of expiration that it had never been dealing with anyone who had the authority required under the [FCC] rules," DirecTV said in the complaint.

"Indeed, DirecTV still does not know with whom it should be speaking - Tribune's CEO or its associated hedge funds and investment banks."

After entering bankruptcy in December 2008, DirecTV said Tribune sought FCC approval to transfer its broadcast licenses to a new entity that will eventually emerge in Tribune's reorganization.

DirecTV said three of Tribune's largest creditors - JP Morgan Chase Bank, Angelo, Gordon & Co. and Oaktree Partners - will control 30% of the voting and equity interests, but the FCC has yet to rule on those transfers.

DirecTV said that means those same hedge funds and investment banks currently lack authority over Tribune broadcast operations.

Tribune response

In a separate release, Tribune said, "We never reached agreement with DirecTV on all the terms of the contract - not in principle, not by handshake and not on paper."

"We didn't have an agreement on Thursday, March 29, and we do not have an agreement now," Tribune said.

Tribune said it and DirecTV have been negotiating a complex, multi-year contract for the carriage of local television stations and WGN America for months.

"Over the course of any negotiation, parties may agree in principle on some terms and disagree on others, but it takes closure on all terms by both parties to reach an agreement," Tribune said in the release.

Tribune said its most recent filing with the FCC regarding its expected emergence from bankruptcy was just to provide the commission with data it would need to evaluate following confirmation of a restructuring plan.

"Any intimation that our broadcast licenses have been prematurely transferred is simply false and misleading," Tribune said in its release.

Negotiating tactic

In addition, Tribune said claims of "bad faith" and "outrageous conduct" are negotiating tactics used in an attempt to unfairly disadvantage Tribune from receiving fair market compensation from DirecTV for carrying the local stations and WGN America.

Tribune said it remains committed to an expeditious negotiation with DirecTV for the carriage of the stations.

Tribune, a Chicago-based media company, filed for bankruptcy on Dec. 8, 2008 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 08-13141.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.