A federal judge has dismissed the antitrust lawsuit that DirecTV filed against Nexstar last year accusing the TV station giant of price-fixing in connection with its retransmission consent negotiations with the satellite TV platform.
DirecTV’s suit, filed in New York’s Southern District in March 2023, accused Nexstar of engaging in price-fixing activity around the retransmission consent fees from MVPDs that have become a key source of revenue for local station owners. In his ruling issued March 20, Judge P. Kevin Castel dismissed the filing, without prejudice, arguing that DirecTV didn’t suffer enough significant harm in its dispute with Nexstar and related TV station owners to warrant an antitrust claim.
“DirecTV’s injuries are too indirect and speculative to confer antitrust standing,” Castel wrote.
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In a statement, DirecTV stated through a spokesman, “This ruling sets a dangerous precedent that a victim of price-fixing needs to pay the inflated price before it can make a claim in court.” The satellite TV provider is said to be strongly considering an appeal.
The case stemmed from the breakdown of negotiations over TV station retransmission consent terms between DirecTV and stations owned by Mission Broadcasting and White Knight Broadcasting. Both of those broadcasters are financially affiliated with Nexstar Media Group, which is the nation’s largest operator of TV stations. DirecTV’s lawsuit accused Nexstar of conspiring with Mission and White Knight leaders to demand big increases in retrans fees in exchange for renewing the contracts that allow DirecTV to carry local broadcast stations. DirecTV argued that Nexstar, Mission and White Knight colluded in order to set a new floor price for retrans fees for Nexstar stations when the time came to renew those retrans contracts with DirecTV.
DirecTV argued that it lost customers in Mission and White Knight markets because it could no longer offer their stations as part of its channel package. Mission owns several dozen stations across 26 markets in the U.S., including WPIX-TV New York.
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The 17-page ruling found that DirecTV had plausible points in its filing, but in the big picture, the judge rejected the legal argument that DirecTV had been harmed by antitrust behavior on Nexstar’s part.
“Plaintiff’s theory is as follows: (1) Defendants demanded supracompetitive prices; (2) Plaintiff did not renew its retransmission contract; (3) Defendants’ stations were blacked out on DirecTV; (4) subscribers left DirecTV because of the blackouts resulting in lost profits. This theory is speculative because it relies on two critical assumptions: that absent Defendants’ collusive demands the parties would have reached an agreement, and that had the parties agreed, subscribers would not have left DirecTV,” the judge wrote. “There is no way of knowing whether, and on what terms, the parties would have agreed, and whether because of such an agreement, subscribers would have stayed with DirecTV. Further, Plaintiff’s injury is indirect, as DirecTV did not pay higher prices, but claims to have suffered by losing customers due to the blackouts.”
The ruling cited similar litigation that the city of Oakland brought in 2018 against the city’s former NFL team, the Raiders, accusing the team and the league of manipulating the market for NFL teams in order to make the city pay more for a new stadium. That case was also dismissed.
In response to the ruling, a Nexstar spokesman stated, “We’ll let the court’s decision speak for itself.”
