A federal judge dismissed DirecTV’s antitrust lawsuit against Nexstar last year accusing the TV station giant of price fixing in connection with retransmission consent negotiations with the satellite TV platform.
The DirecTV lawsuit, filed in the Southern District of New York in March 2023, accused Nexstar of engaging in price-fixing activity around retransmission consent fees from MVPDs that had become a major source of revenue for local station owners. In his March 20 ruling, Judge P. Kevin Castel dismissed the lawsuit, without prejudice, arguing that DirecTV had not suffered significant enough damages in its dispute with Nexstar and related TV station owners to justify an antitrust suit.
“DirecTV’s injuries are too indirect and speculative to confer antitrust standing,” Castel wrote.
The case arose from the breakdown of negotiations over terms for agreeing to rebroadcast the television station between DirecTV and stations owned by Mission Broadcasting and White Knight Broadcasting. Both of these broadcasters are financially affiliated with Nexstar Media Group, the country’s largest television station operator. DirecTV’s lawsuit accused Nexstar of conspiring with Mission and White Knight leaders to demand significant increases in retransmission fees in exchange for renewing contracts that allow DirecTV to air local broadcast stations. DirecTV argued that Nexstar, Mission, and White Knight colluded to set a new minimum retransmission fee for Nexstar stations when it came time to renew those retransmission contracts with DirecTV.
DirecTV argued that it lost customers in the Mission and White Knight markets because it could no longer offer their stations as part of its channel package. Mission owns several dozen stations in 26 U.S. markets, including WPIX-TV New York.
The 17-page ruling found that DirecTV had reasonable points to make, but in the big picture, the judge rejected the legal argument that DirecTV had been harmed by Nexstar’s antitrust conduct.
“Plaintiff’s theory is as follows: (1) Defendants demanded above-competitive rates; (2) Plaintiff did not renew its retransmission contract; (3) Defendants’ stations were blacked out on DirecTV; (4) subscribers left DirecTV due to outages The judge wrote: “This theory is speculative because it relies on two important assumptions: that in the absence of the defendants’ collusive demands, the parties would have reached an agreement, and that if the parties had agreed, subscribers would not have left DirecTV.” “There is no way to know.” Whether the parties will agree, on what terms, and whether subscribers will remain with DirecTV because of such an agreement remains to be seen. Furthermore, plaintiff’s injury is indirect, as DirecTV did not pay higher rates, but claims it suffered loss of customers due to power outages.
The ruling cited a similar lawsuit filed by the city of Oakland in 2018 against the city’s former NFL team, the Raiders, accusing the team and league of manipulating the market for NFL teams in order to get the city to pay more for a new stadium. This case was also dismissed.