News & Analysis
The Justice Department has settled its lawsuit against AT&T and DIRECTV without requiring either to carry SportsNet LA, the TV home of the Los Angeles Dodgers.
The feds claimed that DIRECTV (now owned by AT&T) engaged in an illegal campaign to prevent SportsNet LA from being carried by the major TV providers in the Los Angeles market.
To accomplish that aim, the satcaster, the suit says, shared confidential information with its rivals to help persuade them from carrying it.
Since its launch in 2014, DIRECTV and most other major TV providers in the LA area have refused to carry SportsNet LA, saying its carriage fee is excessive. The only major providers that have agreed to carry it are Time Warner Cable (now Charter) and Charter itself. (TWC, which is now owned by Charter, agreed to pay the Dodgers $8.35 billion over 25 years for the broadcast rights to the Dodgers games.).
While some believed that the Justice Department would use the lawsuit as leverage to force DIRECTV and AT&T to carry SportsNet LA, DOJ said in a statement last night that was never its goal.
“Negotiations between video programmers and [pay-TV companies] are often contentious, high-stakes undertakings,” Justice Department attorneys wrote in a court filing, according to The Los Angeles Times, which first broke the news that the settlement would likely not require carriage. “The proposed final judgment is not intended to address such negotiating tactics, or to impose any agreement upon Time Warner Cable, which owns rights to the Dodgers Channel, or any [pay-TV company] that is not the result of an unfettered negotiation in the marketplace.”
Instead, the settlement will require the pay TV providers to no longer share private information with other cable or satellite services.
The Justice Department’s view of the lawsuit may have changed when President Trump defeated Hillary Clinton in November. The lawsuit was filed several days before the election and it’s possible that a Democratic administration would have been more aggressive in pursuing strict terms on DIRECTV and AT&T.
(Why would the Democrats care about the Dodgers? Numerous Democratic politicians from California had been pushing federal officials to cajole DIRECTV to carry SportsNet LA. Also of note: Several prominent members of the Los Angeles Dodgers’ ownership team are Democrats who have made sizable contributions to now former President Obama and other high-ranking Democrats. It’s not a stretch to conclude that the Obama-led Justice Department was encouraged to help out by filing the lawsuit, which many experts deemed shaky on the legal merits.)
Plus, since Trump’s surprise win, the two top Justice officials overseeing the department’s anti-trust division (which brought the lawsuit) have left the government.
A federal judge must still approve the settlement before it becomes official.
— Phillip Swann