Published: Mon, June 20, 2016
Business | By Max Garcia

Tribune Channels Blacked Out On DISH In Contract Dispute

Tribune Channels Blacked Out On DISH In Contract Dispute

DISH Network (DISH) lost its distribution of Tribune Media's (TRCO) WGN America cable and 42 local television stations as the channels went dark late Sunday. In a statement Sunday, Warren Schlichting, Dish Network's executive vice president of programming, accused Tribune of trying to extort "unreasonable" rate increases for its broadcast channels, which, he points out, are already available over the air for free.

"Dish is actively working to reach a deal before the contract expires, and we have offered a contract extension to Tribune to keep the channels available to customers in the event that we are unable to reach a deal by the deadline", a spokesman said.

DISH claims Tribune is force bundling the unrelated, and low-performing cable channel, WGN American, with its local broadcast stations.

The 1992 Cable Act gave broadcasters the right to seek retransmission consent fees, an increasingly important revenue source for TV stations. DISH does not believe that WGN America should be included in the negotiations, as viewership of the cable channel "is down on average more than 20% since the channel's launch".

Tribune released a statement before the blackout warning Dish subscribers of the potential programming interruptions. DISH argues that this move "is using local viewers as leverage to raise rates for WGN America".

Any negotiations with Dish, Weitman said, would be done through Tribune Broadcasting, which owns or operates 42 stations across the country.

The local KWGN-Channel 2 and KDVR-Channel 31 are owned by Tribune, as is the WGN cable network. The terms of the extension said that when the two sides agreed to a new rate, it woudl be paid retroactively.

"Our offer demonstrates that we want to continue servicing our local communities. Consumers shouldn't have to pay twice for the same programming". "We also believe the FCC has the opportunity to investigate remedies like arbitration with interim carriage which could end broadcaster blackouts while preserving the interests of all parties". Media industry analysis company SNL Kagan reports that broadcast fees were grew from $215 million in 2006 to around $4.9 billion in 2014; SNL Kagan forecasts those feeds could reach $10.3 billion by 2021.

Dish customers have been here before.

The Tribune stations involved include ABC, CBS, Fox and NBC affiliates in New Orleans, Indianapolis, San Diego and Oklahoma City as well as stations in Chicago, New York and Los Angeles.

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