Fee fight may sideline Super Bowl fans
200,000 DirecTV customers are cut off from channels 7 and 56 as an industry dispute drags on
More than 200,000 DirecTV customers in Greater Boston have been cut off from channels 7 and 56 since Saturday, and they might miss the Super Bowl unless the satellite provider settles its dispute with the stations’ owner.
Florida-based Sunbeam Television Corp. - owner of WHDH-TV (Channel 7), WLVI-TV (Channel 56), and a sister Fox affiliate in Miami - blacked out its stations on the DirecTV service as it seeks an increase in “retransmission consent fees,’’ which are negotiated between TV stations and cable and satellite companies.
Chris Wayland, general manager of WHDH and WLVI, said that DirecTV’s proposed fees are too low, but he would not provide specific numbers.
“We have negotiated several agreements with several other cable companies, which has clearly set a market rate,’’ Wayland said. “At this point, DirecTV is not willing to come anywhere what the established market rate is. . . . We are still negotiating and anxious to get to a resolution.’’
DirecTV officials said they have successfully negotiated fee agreements with more than 70 stations in the past year, but Sunbeam is asking for too much. DirecTV has “no problem compensating Sunbeam fairly, but we have to take a stand against runaway greed and a shameless attempt to extort a more than 300 percent fee increase that our customers risk having to absorb,’’ said Derek Chang, executive vice president of programming.
Chang said DirecTV asked Sunbeam to keep the signal available during negotiations over the weekend, to no avail. “We think it’s the totally wrong thing to do to customers,’’ he said.
WHDH officials have suggested that viewers either switch cable or satellite providers or buy digital rabbit ear antennas to pick up the station’s over-the-air signals.
The Four’s bar and grill in downtown Boston has 44 televisions set to DirecTV’s subscription plan, which provides such sports channels as ESPN and Comcast SportsNet. When owner Peter Colton tuned into WHDH yesterday, he was greeted with this message: “The owner of this station has unfortunately forced DirecTV to temporarily remove it from your lineup despite our repeated attempts to keep the station up.’’
Colton was counting on WHDH to bring in a crowd for the Super Bowl on Feb. 5. If the blackout lasts long, it “would definitely hurt us, especially if the Patriots are playing,’’ he said. The Super Bowl will be broadcast on NBC, the network of WHDH.
Jim Catalano of Salem saw the DirecTV message on Saturday, when he and his girlfriend tried to tune into WHDH’s morning newscast. “The consumer is being left in the dark,’’ Catalano said. “I feel terrible about it. If this thing drags on for Super Bowl Sunday, it will have a tremendous impact on me. ’’
Disputes over transmission fees have caused several programming blackouts across the country. The Versus sports channel was knocked off DirecTV for six months in 2009 because of a disagreement about fees. In December of the same year, Time Warner Cable and Fox Network haggled over retransmission agreements that were set to expire on that New Year’s Eve. News Corp., Fox’s parent company, threatened to shut off its signal to more than 10 million customers nationwide just as New Year’s festivities and college football games approached. Time Warner and Fox eventually settled, and the threatened blackout never happened.
Retransmission fees can range from 14 cents per customer for channels such as the Food Network to as much as $4 per subscriber for popular cable sports networks such as ESPN, according to the research firm SNL Financial. Over-the-air broadcast stations charge from 45 to 75 cents per subscriber, according to SNL.
Broadcasters depend on the fees because they provide a steady source of income, said Tony Lenoir, an SNL analyst. “That has become the main source of revenue after advertising revenue.’’
There could be more fee disputes in the long term, he added, and the costs could raise the cable and satellite rates consumers pay. “Moving forward, they will keep rising no matter what,’’ he said. “Certainly, retransmission fees will contribute to that.’’
WHDH’s Wayland said he has had no complaints from advertisers who may not be reaching viewers during the blackout. But Tracie Manna Chinetti, a senior buyer with Blitz, a Waltham media-buying agency, said it may be too soon for the station to feel heat from advertisers.
Since program blackouts are usually short-lived, they typically do not result in discounts or credits for customers, a DirecTV spokesman said. Subscribers, however, can call the provider to see whether they qualify for a rebate based on the loss of local stations.
Johnny Diaz can be reached at email@example.com.