DirecTV, Tribune Dispute Whether Programming Deal Was Reached

DirecTV announced today that it had reached a “handshake deal” with Tribune Co. on a programming agreement on March 29, a statement that Tribune later said has left them “puzzled” and denying any accord.

“There has been no agreement of any kind, handshake or otherwise, on Thursday or any other day,” said Gary Weitman, a spokesman for Tribune, in an e-mail. The Chicago broadcaster issued the statement this afternoon after DirecTV, the largest U.S. satellite-TV provider, said earlier today the pact had been reached. Their previous accord is due to expire at midnight.

The two sides have been negotiating for more than two months on an agreement to allow DirecTV to carry Tribune’s 23 local broadcast stations in 16 U.S. markets. In those markets Tribune owns either the local Fox or CW affiliates. Lack of an accord would jeopardize viewers’ ability to see shows including “American Idol,” Major League Baseball broadcasts, “America’s Next Top Model” and “Gossip Girl.”

DirecTV said today that it had accepted terms proffered by Tribune’s management via telephone two days ago, to ensure that its subscribers didn’t lose access to local news, traffic, weather, sports and entertainment.

Tribune, owner of the WGN cable channel, then released a statement saying it hadn’t reached any agreement with DirecTV and any statement by DirecTV saying otherwise was “inaccurate and misleading.” Asked whether talks were continuing, Tribune’s Weitman said in a telephone interview, “I don’t want to comment upon or characterize the negotiation process.”

‘Bad Faith’

“Their actions are the true definition of ‘bad faith’ in every sense of the term,” said Darris Gringeri, a DirecTV spokesman, in an e-mail. “If the local stations and WGN America do come down at midnight, it will be 100 percent Tribune’s decision to take them away from customers.”

In February, DirecTV said it posted a 16 percent increase in fourth-quarter profit as customer gains in Latin America climbed to a record. The company said its programming costs rose because of network fee increases and expenses related to its NFL Sunday Ticket football content.

The programming expense will be exacerbated when DirecTV negotiates new contracts with CBS Corp. and Discovery Communications Inc. this year, said Michael McCormack, an analyst at Nomura Securities International Inc. in New York, in an interview in February.

Tribune, the Chicago-based owner of the Los Angeles Times and the Chicago Tribune newspapers, filed for bankruptcy in December 2008, one year after a leveraged buyout led by real-estate billionaire Sam Zell. Since then, the company and hedge funds holding Tribune’s senior debt have fought to win approval of a plan to divide ownership among the lenders that financed the $8.3 billion buyout.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE