KATC, DIRECTV dig in heels

Thousands of DIRECTV customers in the Acadiana market are not getting KATC TV3 and its CW offshoot as of Jan. 1 due to a dispute between the local ABC affiliate's parent company and the satellite provider over the retransmission fee DIRECTV pays for the former's content. Each side seems to currently have its heels dug in as KATC appeals to viewers through its website and social media to contact DIRECTV and urge the satellite company to cut a deal.

“We are disappointed with DIRECTV’s decision to drop KATC from their line-up and completely understand the frustration that our viewers on DIRECTV must be having over the outage,” says Andrew Shenkan, KATC’s general manager. “Our company tried to reach an agreement with DIRECTV since November in order to negotiate a fair market agreement with DIRECTV for the KATC channels that they resell to their subscribers.”

So far, no deal.

The blackout means that KATC programming — its ratings-leading news programs primarily — cannot be seen by thousands of viewers in the local television market. Short-term that’s an aggravation, but if the dispute is protracted it could impact KATC’s bottom line in terms of sagging Neilsen ratings, although the next ratings period, known in the industry as “sweeps,” is still nearly a month away.

KATC maintains that its request for a fair-market increase in the retransmission fee paid to it by DIRECTV is in keeping with standard industry rates. (The channel has not disclosed what DIRECTV paid in retransmission fee through the end of 2014 nor how much of an increase KATC's parent company is seeking.)

Shenkan points to satisfactory agreements with Cox, LUS Fiber, Dish Network and other providers in disputing DIRECTV’s claim that the fee increase is unreasonable: “DIRECTV may claim that the station is seeking an unreasonable fee increase as a means to garner support in this dispute; however, the fact still remains that we have retransmission consent agreements with every other local and national provider, so DIRECTV is the only company that has been unable to reach an agreement with us.”

So, who benefits? Certainly KATC’s chief competitor in the Lafayette market, KLFY, which has fallen into a distant second-place to KATC in ratings over the last decade. KPLC, the Lake Charles NBC affiliate, probably benefits in the short term, too, as it competes for ratings in the Lafayette market and ratings translate into ad revenue for TV stations (see the “sweeps” caveat above). Also, WBRZ, Baton Rouge’s ABC affiliate, could benefit as well, as fans of ABC programming — original sitcoms, dramas and syndicated daytime programming — turn to the BR affiliate to get their fix.

KATC argues that its costs in securing programming warrant the fee increase. “The fee would equate to less than a dime a day for both KATC and KATC-CW,” Shenkan says. “The vast majority of the programming fees we receive from cable and satellite providers go directly back into programming costs levied by our network and studio partners that produce and distribute the content viewers value most. The fees also provide resources to continue to deliver the local news, weather, and sports coverage viewers count on.”

Disputes between satellite providers and television companies are not uncommon. Late last year Fox News and Dish were at odds over a retransmission fee, and in 2012 DIRECTV blacked out stations in Miami and Boston in a retransmission-fee dispute with the stations’ parent company. KATC is owned by Cordillera Communications. The dispute affecting KATC and other Cordillera stations impacts about half a million viewers in several states.

“We will continue to work diligently toward a solution to this dispute and are committed to reaching an agreement as soon as possible,” Shenkan adds. “Until that time, we ask for viewers' support and patience, but also urge them to explore other means to watch our programming.”