RSN Divestitures By Disney Must Not Create New Threat Of Dual Blackout Of ‘Must-Have’ Content
For Immediate Release
Contact: Ted Hearn
PITTSBURGH, October 15, 2018 – The American Cable Association is urging the Department of Justice to protect consumers by prohibiting the divestiture of Fox’s regional sports networks (RSNs) to a Big 4 TV station or a multichannel video programming distributor (MVPD) within the same local market as the RSN. Permitting either kind of common ownership would lead to higher retail prices for traditional pay-TV service.
The DOJ approved Disney’s $71.3 purchase of a major portion of Rupert Murdoch’s TV and film empire by insisting on the divestiture of Fox’s 22 RSNs. In a letter submitted to DOJ today as part of the Department’s Tunney Act review, ACA said DOJ would only create new antitrust problems if Disney were allowed to sell the RSNs to an in-market ABC, CBS, NBC or Fox station or to an in-market MVPD.
ACA’s letter explained that permitting an in-market Big 4 broadcaster to purchase a Fox RSN would create a similar problem to that identified in the original transaction because it would allow a single firm to threaten to withhold two sets of must-have programming, thereby leading to an increase in MVPD licensing fees.
Likewise, permitting an in-market MVPD to purchase an RSN would create a vertical integration problem similar to the one the DOJ identified in blocking the AT&T-Time Warner merger. The combined entity would have greater leverage to threaten to withhold RSN programming from rival MVPDs than would a stand-alone RSN owner, thereby leading to increased MVPD licensing fees.
“DOJ’s Antitrust Division has the sole discretion to approve a divestiture party for Fox’s RSNs. It should modify the proposed Final Judgment to make clear beforehand that it will use such discretion to prohibit any divestiture to a same-market broadcaster or same-market MVPD. The public interest dictates such a modification,” ACA President and CEO Matthew M. Polka said.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing more than 700 smaller and medium-sized, independent companies that provide broadband, phone and video services to nearly 8 million customers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA’s members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit: https://acaconnects.org/