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Tribune Broadcasting & DirecTV At Impasse Over Retrans Deal; Stations May Be Blacked Out Next Week

Tribune Company released a statement this afternoon letting DirecTV subscribers know that Tribune Broadcasting television stations, both local and the national superstation WGN America, could soon be gone from the satellite television provider. The problem appears to be over broken-down negotiations over retransmission fees.

Tribune Company's current deal with DirecTV expires at Midnight, March 31st. If no temporary or permanent deal is reached by the end of this week, DirecTV will black out the Tribune-owned local stations in 19 markets, including Chicago, as well as blacking out WGN America nationwide.

Nils Larsen, Tribune Broadcasting President, said in the statement today: "Despite our best efforts, DirecTV is refusing to offer a fair deal and we remain far apart in negotiations. As a result of DirecTV's inflexibility, there's a strong likelihood that service interruptions will occur. We feel we have an obligation to make sure DirecTV subscribers are aware that they will lose the programming provided both by our local stations and WGN America after Saturday."

The press release is in and of itself, a negotiating tactic by Tribune Company to pressure DirecTV into avoiding bad publicity by giving into Tribune Broadcasting's requests for compensation. Additionally, Tribune Company has even set up an interactive web site, TellDirecTV.com, to have worried DirecTV customers put pressure on the television provider, so they will not lose their local channels.

The tactics are eerily similar to those used by FOX Television in mid-October last year, when it demanded more money from DirecTV and was rejected. FOX sent out press releases and set up an anti-DirecTV website (since removed), using fear tactics to get the public to rally to their cause. FOX stations even aired ads with false information about DirecTV, prompting DirecTV's attorneys to file complaints with the FCC and issue cease & desist orders. The two sides reached an agreement by the end of that month.

Using the public to pressure satellite and cable television providers to pay more for retransmission fees has become relatively commonplace in the last year or so.

That is not to say that Tribune Broadcasting isn't within its right to ask for compensation. According to today's press release, DirecTV has not compensated Tribune Broadcasting at all in the last 10 years, as the company previously allowed DirecTV to air its stations for no fees. With DirecTV paying some other major broadcasters for the rights to retransmit their programming, Tribune Company wants to be treated equally.

So far, DirecTV has not issued any public statements regarding the negotiations with Tribune Company or Tribune Company's public actions today.

Leading many to believe a settlement will soon be reached is the fact that Tribune Company's current CEO, Eddy Hartenstein, was the founding CEO of DirecTV from 1990-2003, and still has strong connections within the company.


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