AT&T, DOJ Settle Dodgers Suit

Justice says MVPD agreed not to share confidential info with competitors going forward

The Department of Justice has reached a settlement agreement with DirecTV parent AT&T in which AT&T agreed not to share "confidential, forward-looking information with competitors."

The antitrust division filed suit Nov. 2, alleging that DirecTV was the lead entity in "information exchanges" with other pay-TV providers -- Cox, Charter and AT&T U-verse -- during negotiations for Time Warner Cable-owned SportsNet LA and its Los Angeles Dodgers Major League Baseball games. AT&T owns DirecTV but did not at the time the lawsuit covers.

The agreement stipulates that "when DIRECTV and AT&T negotiate with providers of video programming, including negotiations to telecast the Dodgers Channel, they will not illegally share competitively-sensitive information with their rivals."

There will also be mandatory monitoring -- by the companies, not the government -- of communications between programming execs and other providers, as well as compliance programs and "antitrust training."

“We are pleased to have resolved this matter to the satisfaction of all parties," said an AT&T spokesperson.

The Los Angeles Timeshad reported earlier that settlement talks were under way that would not require other distributors to pick up the Dodgers' channel. The Times had said a hearing on AT&T's motion to dismiss the lawsuit was pushed back to March 27.

Time Warner Cable launched SportsNet LA, with the Dodgers' games, in February 2014, but a number of distributors complained about the price — some reports put it as high as $4 per subscriber per month — especially considering that there were three other regional sports networks (RSNs) in the market (Prime Ticket, Fox Sports LA and Time Warner Cable SportsNet). Thus far, Charter, which acquired Time Warner Cable and Bright House Networks in 2016, remains the only major distributor in the market carrying SportsNet LA. 

Charter in June 2015 agreed to launch SportsNet LA, but only after signing the deal to acquire TWC and BHN.

The lawsuit alleged that DirecTV "unlawfully exchanged competitively-sensitive information with Cox, Charter and AT&T during the companies’ negotiations for the right to telecast the Dodgers Channel," as well as future plans to carry the channel -- or not carry it. The complaint alleged that information "was a material factor in the companies’ decisions not to carry the Dodgers Channel,” and pointed out that the Dodger Channel “is still not carried by DIRECTV, Cox or AT&T."

The Justice Department's complaint had pointed out that TWC in 2012 successfully obtained deals with reluctant (over price) distributors, including DirecTV and Cox, to carry what was then called TWC SportsNet (showing Los Angeles Lakers basketball games) by offering incentives to AT&T U-verse and Charter to sign on. Cox and DirecTV, then faced with competitors' promoting access to Lakers' games, agreed to carry the Lakers' network even though the price was higher than their internal analyses estimated it was worth. DirecTV, according to the Justice lawsuit, was determined to "not let that happen again."

“When competitors email, text, or otherwise share confidential and strategically sensitive information with each other to avoid competing, consumers lose,” said Acting Assistant Attorney General Brent Snyder of the Antitrust Division. “Today’s settlement promotes competition among pay-television providers and prevents AT&T and DIRECTV from engaging in illegal conduct that thwarts the competitive process.”