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U-verse customers lose WSVN in a dispute over transmission rights

WSVN news studios
WSVN news studios Miami Herald File via SUn Sentinel

Miami’s WSVN-Fox 7 flickered and disappeared early Saturday morning from the screens of viewers who get their TV service from AT&T U-verse when talks between the two on a new transmission-rights deal collapsed.

The dispute threatens to keep U-verse customers from being able to see Sunday’s NFL playoff game between Seattle and Carolina, at least without hooking their TV sets up to antennas or going online.

Though spokesmen for both AT&T and Sunbeam Television Corp. — WSVN’s corporate parent — insisted that their companies were anxious to resolve the impasse over a new contract, each also accused the other of intransigence. And neither seemed optimistic that the blackout would end quickly.

History seems to support them. The last such dispute in South Florida — between WSVN and satellite television service DirecTV, in January 2012 — lasted 13 days and likely ended only because neither side wanted to be blamed for blacking out the Super Bowl, which was televised on Fox that year.

“We’ve reached an impasse with AT&T in terms of them compensating us fairly to rebroadcast our signal,” declared WSVN general manager Chris Wayland, who ordered the cable company to stop showing his station when the old contract expired a moment after midnight Saturday morning. “There’s very much of an established marketplace for what compensation we should receive for retransmitting our signal. We are not asking for any more or less than that.”

AT&T, however, said WSVN is trying to loot the cash register.

“Sunbeam is demanding a significant increase in their current fees that we believe is unreasonable, just to let these same customers keep watching shows that remain available for free over-the-air on Channel 7,” said an AT&T spokeman.

At stake are what the television industry calls retransmission fees, the sums paid by cable and satellite companies to networks and local stations for the right to carry their signals. Retransmission fees run into the millions of dollars, and their importance is magnified even further because they inevitably affect the companies’ deals with others.

“If a cable company agrees to pay the Fox station X number of dollars, then the ABC and CBS and NBC stations all want X number of dollars, too,” said one television executive who asked not to be identified Saturday. “And if the Fox station settles for less than it wants from the cable company, all the other cable companies will want to pay less, too.”

Television stations in recent years have relied on the retransmission fees to replace money lost from advertisers, who want to pay less for commercials that viewers zip by on their DVRs without watching. But cable and satellite companies are worried that the escalating retransmission fees (they skyrocketed from $28 million in 2005 to $6.3 billion in 2015, according to media analysis firm SNL Kagan) are raising cable bills so high that their customers are cutting the cord, turning to old-fashioned over-the-air TV and to Internet programming services like Hulu and Netflix.

The result is that negotiations over retransmission fees have turned brutally hardball in recent years. Blackouts — once thought of as a nuclear option to be threatened but almost never actually resorted to — are now routine. The American Television Alliance, an industry group that tracks blackouts, says they’ve risen from just eight in 2010 to 193 last year. More than a dozen have already occurred in the first two weeks of 2016.

This dispute has a much smaller footprint than the one between Sunbeam and DirecTV in 2012. AT&T U-verse serves a much smaller number of South Florida homes than DirecTV. (Though AT&T and DirecTV merged six months ago, they still mostly have separate contracts with TV networks, and DirecTV customers aren’t affected by the blackout.) And unlike 2012, Sunbeam’s Boston TV station isn’t involved, because AT&T U-verse isn’t available there.

But the blackout may last longer because no threat of a blacked-out Super Bowl looms in the background. SUnday's playoff game on WSVN will be available on the Internet at http://www.foxsports.com/foxsportsgo/ or by hooking up an antenna.

AT&T vice president Robert Thun sent WSVN a letter Saturday offering to pay the station for a full day of programming if it would relax the blackout for three hours to show the playoff game.

WSVN general manager Wayland said that he still hadn’t received the letter early Saturday evening, but that it didn’t matter. “We will air game only if we have a deal,” he said.

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