Justice Department Settles AT&T’s DirecTV Case on Baseball Blackout Collusion
The Justice Department reached a settlement with AT&T unit DirecTV, which it had accused of illegally swapping information with rival pay-TV providers about negotiations to show Los Angeles Dodgers baseball games in Southern California, according to court filings Thursday.
The government said in a complaint last year that because of the information swaps, most Los Angeles residents were unable to watch the Dodgers games on television for the past three years.
The settlement does not require any pay-TV company to carry the Dodgers channel but does require DirecTV to refrain from swapping competitively sensitive information with rivals, according to a court filing.
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Under the settlement, the companies must also monitor some communications that their executives have with competitors and to implement compliance programs.
“We are pleased to have resolved this matter to the satisfaction of all parties,” said AT&T spokesman Michael Balmoris in an email.
AT&T (T) is undergoing an antitrust review of its planned purchase of Time Warner (TWX) The Justice Department is scrutinizing the deal, which President Donald Trump has criticized.
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The Justice Department filed a lawsuit in November 2016 which accused a DirecTV executive of assuring executives at Cox, Charter Communications (CHTR) and AT&T in 2014 that DirecTV had no plans to strike a deal with the Dodgers’ station to show their games.
In the end, all of the companies refused to carry the SportsNet LA channel, a partnership between the Dodgers baseball team and Time Warner Cable created in 2013, contending that it was too pricey.
Since none of the companies showed the games, they did not risk losing subscribers to a rival that did.
The purported collusion took place before AT&T bought DirecTV in 2015 and Charter purchased Time Warner Cable in 2016.
Among other evidence, the complaint cited then DirecTV CEO Mike White’s public comments in a May 2014 industry conference that it was important that “distributors start to stand together, like most of us have been doing in Los Angeles for the first time ever, by the way, with the Dodgers on outrageous increases and excesses.”
The fight illustrates the importance of live sports to pay-TV, which is seeing a dwindling number of subscribers even as sports programming costs rise.