DirecTV and A+E Networks are facing a deadline of midnight ET Tuesday to strike a new deal that will keep A+E Networks channels on DirecTV, DirecTV Now and U-verse. A+E was expected to begin running a crawl Saturday evening on select programs across its channels informing viewers of the potential for the channels to go dark.
Negotiations are ongoing but A+E Networks brass are clearly concerned. A+E Networks Group CEO Paul Buccieri alerted company staffers to the situation in a memo sent Saturday afternoon.
“AT&T has not demonstrated a willingness to negotiate reasonably,” Buccieri wrote. “The deal we are seeking is based on the same fair market terms that have allowed us to reach deals with numerous other providers. AT&T simply has not yet demonstrated that they recognize the value of our programming and the high regard we have for our viewers – including AT&T’s own customers.”
DirecTV parent AT&T has been blunt in its discussions with Wall Street about its intent to hammer down on rising programming costs as DirecTV service suffers from substantial subscriber losses as the pay-TV eco system evolves. Earlier this week, AT&T reported a loss of 544,000 DirecTV subscribers in the first quarter, bringing total subs across AT&T’s MVPD services to 22.4 million.
AT&T is under pressure to improve the financial picture at DirecTV as the company shoulders a $170 billion debt load leftover from its acquisitions of DirecTV in 2015 and Time Warner in 2018.
DirecTV in a statement said it was trying to protect consumers from price increases.
“We’re disappointed to see A&E put our customers in the middle of their negotiations. We are on the side of customer choice and value and want to keep these channels in our customers’ lineups. We hope to avoid any interruption to these channels that some of our customers care about,” DirecTV said in a statement. “Our goal is always to deliver the content our customers want at a value that also makes sense to them. We’ve always fought to get the best deal for our customers, delivering the content they want at a great value. We’ll continue to fight for that here.”
Buccieri raised the specter of AT&T discriminating against an outside programming service after bulking up on acquisitions. DirecTV last month concluded tense carriage renewal negotiations with Viacom that also involved public saber-rattling on both sides.
But DIrecTV is not alone among distributors in facing contract showdowns. Public disputes between MVPDs and programmers are on the rise at a time of rapid transformation of the pay-TV marketplace as low-cost new entrants such as Hulu and YouTube move in. Last month DirecTV rival Dish came to terms on a carriage deal with Univision after a nine-month blackout.
“Having recently acquired WarnerMedia, AT&T appears intent on using their new position to gain an unfair advantage for their own channels,” Buccieri wrote. “Many, including the U.S. Department of Justice, were concerned that AT&T would have the ability and incentive to discriminate against programmers like A+E Networks and others like us. It seems that concern has become a reality.”
A+E Networks is expected to begin running promo spots warning viewers about the contract tussle, and a crawl message on its largest channels. The A+E Networks channel portfolio also includes FYI, Lifetime Movie Network and Viceland.
(Pictured: A&E Network’s “Live PD”)