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DirecTV Files FCC Complaint Questioning Tribune’s Control

April 2 (Bloomberg) -- DirecTV, the largest U.S. satellite-company, filed a complaint with the Federal Communications Commission accusing Tribune Co. of negotiating a new programming contract in “bad faith” and questioning who is making decisions at the company.

Tribune’s management agreed to a new contract allowing the satellite-TV provider to carry its 23 local broadcast channels on March 29, according to DirecTV’s filing, a claim Tribune denies. The satellite-TV company claimed the deal was overruled by Tribune’s creditors and debt holders, including Oaktree Partners, Angelo Gordon, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc.

“DirecTV still does not know with whom it should be speaking -- Tribune’s CEO or its associated hedge funds and investment banks,” the El Segundo, California-based company said in an accompanying statement.

Tribune’s CEO is former DirecTV president Eddy Hartenstein. DirecTV also accused Tribune of transferring control of its broadcast license to its creditors without permission, a violation of the FCC Communications Act, according to the filing.

Tribune wants DirecTV to pay retransmission fees for the local stations it carries. On March 31, DirecTV said it had accepted Tribune’s financial terms to broadcast the stations. About an hour later Tribune released a statement saying it had not reached an agreement.

Channel Blackouts

Tribune’s local broadcast stations and cable network WGN America were blacked out to DirecTV’s customers at midnight April 1. More than 5 million subscribers have lost at least one channel, DirecTV said. Tribune owns local Fox and CW affiliate stations in markets including Los Angeles, New York and Chicago.

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 for approval of a plan to divide ownership among the lenders that financed the $8.3 billion buyout.

Gary Weitman, a Tribune spokesman, didn’t respond to a phone call seeking comment.

DirecTV rose 1.2 percent to $49.94 at the close in New York time. The shares have advanced 17 percent this year.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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