Group Sues Comcast, Sharpton for $20B

NAAAOM Claims Cable Operator Discriminates Against African-American Owned Channels
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The National Association of African-American Owned Media and Entertainment Studios, a media company owned by comedian and entrepreneur Byron Allen, has filed a $20 billion discrimination suit against Comcast and civil rights figure The Rev. Al Sharpton, claiming they have blocked the growth of 100% black-owned cable channels.

In a suit filed in U.S. District Court in California on Feb. 20, the NAAAOM claims that Comcast has refused to do business with 100% African American owned businesses, alleging that the media giant spends about $25 billion annually to license pay TV channels and on advertising, yet 100% African-American owned media receive less than $3 million per year.

The suit is similar to one the NAAAOM brought against AT&T in December. Like Comcast, which is in the middle of federal approvals for its planned merger with Time Warner Cable – AT&T is in the process of acquiring satellite giant DirecTV.

Comcast has been cited for several diversity awards – it was recently named one of the 40 Best Companies for Diversity by Black Enterprise magazine – and has prided itself in its track record in hiring executives and workers of color. The company, in a statement called the allegations frivolous.

“While we do not generally comment on pending litigation, this complaint represents nothing more than a string of inflammatory, inaccurate, and unsupported allegations,” Comcast said in a statement. “We are proud of our outstanding record supporting and fostering diverse programming, including programming from African American owned and controlled cable channels.   We currently carry more than 100 networks geared toward diverse audiences, including multiple networks owned or controlled by minorities.  Diversity organizations from across the country, including numerous diverse programmers, have supported our transaction with Time Warner Cable.  That deal will extend our industry-leading commitment to diverse programming to even more homes across America, one of the reasons so many groups in the African American community have supported it. Comcast has engaged in good faith negotiations with this programmer for many years.  It is disappointing that they have decided to file a frivolous lawsuit.  We will defend vigorously against the scurrilous allegations in this complaint and fully expect that the court will dismiss them.”  

Sharpton, who was accused of supporting Comcast's merger desires in return for financial reports, has called the allegations frivolous according to reports and that he plans to file counterclaims for defamation.

In the suit, NAAAOM claims that although it was required to help create minority owned channels as part of the conditions put on its 2011 acquisition of NBC Universal, Comcast has done little to  foster the growth of 100% black-owned media, instead helping to create networks owned by friends of company executives or that serve as “token fronts,” or “window dressing,” with African American celebrities posing as owners for black channels that are controlled by white-owned businesses.

For example the suit alleges that one black-owned channel is actually owned by Highbridge Capital, a fund run by former Comcast executive Payne Brown and a subsidiary of investment bank JP Morgan.

The only 100% African America-owned network currently carried by Comcast, according to the suit, is the Africa Channel, which the organization claims is owned by a former Comcast/NBCU executive who was instrumental in putting together Memorandums of Understanding from minority groups to win approval of the NBCU deal.

Allen’s Entertainment Studios produces programming on seven channels and is carried by about 40 distributors in about 7.5 million homes across the country. It does not currently have a carriage agreement with Comcast. The $20 billion damages figure isthe plaintiff's estimation of what Entertainment Studios' value would be had Comcast contracted with them in "good faith."

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