Nearly three dozen Tribune Media television stations, including KTLA Channel 5 in Los Angeles, went dark Wednesday afternoon on Charter Communications’ Spectrum pay-TV service after the two companies failed to reach agreement on a new distribution deal.
Customers in more than 6 million Charter Spectrum cable TV homes nationwide — including 1.5 million in the Los Angeles region — were swept up in the latest fee dispute between two major TV companies. The two sides have spent nearly two weeks in a tense standoff over Tribune Media’s proposed fee increase for the right to carry Tribune Media’s programming as part of the Spectrum pay-TV packages.
Spectrum is the brand name for Charter’s pay-TV, internet and phone service.
“We’re extremely disappointed that we do not have an agreement on the renewal of our contract with Spectrum,” Gary Weitman, Tribune Media spokesman, said Wednesday in a statement. “We’ve offered Spectrum fair market rates for our top-rated local news, live sports and high-quality entertainment programming.… Spectrum has refused our offer and failed to negotiate in a meaningful fashion.”
Charter, in a statement, called the blackout “unfortunate.” The Stamford, Conn., company complained that Tribune simply wanted too much money for its programming.
“Tribune is demanding an increase of more than double what we pay today for the same programming,” a Charter representative said in an email statement. “That is more than we pay any other broadcaster. They’re not being reasonable.”
Tribune Media has been demanding that Charter pay higher fees for the rights to retransmit the signals of 33 Tribune television stations in Charter Spectrum markets. The Chicago broadcaster also asked Charter to pay more to carry Tribune’s cable channel, WGN America.
The outage occurred during KTLA’s afternoon broadcast of the “Jerry Springer” show. Some Spectrum customers in Los Angeles instead saw a message on their screens saying: “Tribune is demanding a ridiculous increase.… We offered a fair price and they insist we pay them materially more than we pay any other of the 1,700 broadcast stations we carry.”
Spectrum customers will miss KTLA’s popular morning newscasts — unless they use a digital antenna to continue to receive the station’s signal. Tribune’s KSWB Channel 5 station in San Diego, which carries Fox network programming, including NFL football, also is included in the outage.
The companies’ previous contract expired at 9 p.m. Monday, but the two sides agreed to a short-term extension to bridge the New Year’s holiday. But that extension expired at 2 p.m. Wednesday.
Tribune also owns CBS and Fox affiliate stations, including KSWB, so the two companies will be under pressure to strike an accord before Saturday, when the NFL playoffs begin. In San Diego, KSWB is scheduled to air the Seattle Seahawks-Dallas Cowboys wildcard game. In Indianapolis, Tribune owns both the Fox and CBS station affiliates — and the Colts are in the playoffs too.
Charter said NFL football fans could access playoff games through mobile apps that are available from the NFL and Yahoo Sports.
The showdown comes at a troubled time for the pay-TV industry. Charter and other cable operators have struggled to control programming costs in an effort to stanch a migration of customers to lower-cost streaming services. The pay-TV industry was projected to lose 1.1 million customers in 2018, including more than 200,000 cable TV subscribers from Charter, according to recent estimates from MoffettNathanson Research.
“Retransmission renewals have become more contentious,” said Justin Nielson, a senior research analyst with Kagan, which is owned by S&P Global Market Intelligence. “The distributors are just getting squeezed. They are losing customers to cord-cutting and paying higher and higher fees for programming.”
Nielson added that Tribune’s rates were considerably lower than other TV station owners, such as CBS or Nexstar Media Group Inc., which agreed in December to buy Tribune Media for $4.1 billion. That deal needs regulatory approval.
Tribune, which used to be part of the same company as the Los Angeles Times, struggled through a four-year bankruptcy, management changes and an aborted takeover last year by another broadcasting company.
“That company has gone through major struggles and felt lucky to get what they could,” Nielson said.
There were about 140 television blackouts in 2018. An impasse between Verizon Communications Inc. and TV broadcaster Tegna Inc. resulted in an outage Monday of network affiliate stations in Washington, D.C., Norfolk, Va., and Buffalo, N.Y. on Verizon Fios systems.
Blackouts in 2018 were down from a record 213 outages in 2017, according to the American Television Alliance, a Washington lobbying group that represents pay-TV operators.
The conflict is over so-called retransmission fees — the money that cable, satellite TV and telephone companies must pay to broadcast local TV station signals as part of their channel lineups. Television station owners in 2018 collected a combined $10 billion in such fees, up from $9.3 billion in 2017, according to the alliance.
Charter and the Los Angeles Times are collaborating on a news magazine show called “L.A. Times Today,” which is scheduled to launch in February on Charter’s Spectrum News 1 channel.