Los Angeles
In a lawsuit filed in federal court in Los Angeles, the Justice Department accused DirecTV of being a ringleader in an effort to make sure that three other pay-TV companies — Cox Communications, Charter Communications and AT&T (which was then separate from DirecTV) — would refuse to carry SportsNet LA, the Dodgers-owned TV channel that broadcasts the team’s games.
The lawsuit alleges that the four companies engaged in illegal conduct, sharing nonpublic information among themselves, to gain bargaining leverage in negotiations with Time Warner Cable, which was struggling to get other pay-TV companies to sign up for the service. The companies were steadfast in their resistance to carrying the channel. The government zeroed in on what it said was the coordinated effort because trading information in such a manner is forbidden by U.S. antitrust laws.
DirecTV, now owned by AT&T, and Cox Communications still refuse to carry the channel, citing its high cost. The 57-page lawsuit painted a picture of a behind-the-scenes effort, spearheaded by DirecTV’s programming chief, Dan York, to make sure that no other pay-TV companies would distribute the channel.
The shutout was costly. For three seasons, thousands of fans were deprived of regularly watching games as the Dodgers improved their standing and repeatedly won their division. They missed watching standout performances by ace pitcher Clayton Kershaw, first baseman Adrian Gonzales and shortstop Corey Seager. Earlier this year, Time Warner Cable made a last-ditch pitch to get DirecTV and other pay-TV companies to carry the channel during the final season featuring Hall of Fame announcer Vin Scully — but struck out. Scully last month ended his career after 67 years in the broadcast booth.
“Dodgers fans were denied a fair competitive process when DirecTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team,” Deputy Assistant Attorney General Jonathan Sallet of the Justice Department’s antitrust division said in a statement. “Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace.”
The Justice Department is demanding injunctive relief, perhaps including monitoring of dealings in the pay-TV industry, to make sure that powerful companies do not gang up against other channel owners. While the Justice Department stopped short of requiring that AT&T/DirecTV carry SportsNet LA, that could become part of any settlement that AT&T ultimately might reach with the federal government.
AT&T is one of the largest pay-TV operators in the Los Angeles region, with more than 1.25 million customers for its DirecTV and U-verse systems.
Time Warner Cable (now owned by Charter Communications and rebranded as Spectrum) has the rights to distribute the channel, which is controlled by Dodgers owner Guggenheim Baseball Management.
