It’s hard to be a baseball fan in Los Angeles. For what feels like ages, the LA Dodgers have had an exclusive deal with Time Warner Cable — now Charter — to air their games in the area. Other carriers reportedly have tried to get access to the games but were stymied, eventually leading to a complicated court case where the Justice Department sued DirecTV over allegations of colluding unlawfully with other carriers in negotiations with SportsNet LA. Now, DirecTV is fighting back.
It’s all a little complicated, but the DOJ lawsuit claimed that DirecTV was acting as the “ringleader” of an information sharing agreement among itself, Cox, AT&T (which now owns DirecTV) and Charter (which at the time, did not own TWC).
Basically, DirecTV is accused of having shared sensitive information about its negotiations with SportsNet LA with the competition. Those exchanges were intended “to reduce each rival’s fear that competitors would” cave in to SportsNet LA’s price demands and carry the channel, the suit claims. “[T]hey no longer had to fear that a decision to refrain from carriage would result in subscribers switching to a competitor that offered the channel.”
In short: If you know your competition is not interested in paying the price for a product, then you know you don’t risk your customers switching to them if you are also not interested in paying the price to sell that product.
But it seems DirecTV now has its defense all lined up and is ready to ask a judge to throw out the DOJ suit, Bloomberg reports.
Rather than colluding to get an edge on the competition, DirecTV says, it was merely protecting its interests after being “burned” by overpaying to air Lakers basketball games in the past.
DirecTV had to talk to others about SportsNet LA because of “TWC’s exorbitant prices and bargaining intransigence,” the carrier claims. DirecTV once paid a premium before to carry TWC’s Lakers channel, only to find that the team’s performance — and ratings — tanked shortly thereafter, and so the company is not interested in repeating the error with baseball.
There is a hearing scheduled for March 13 in which a judge will hear DirecTV and the Justice Department argue out whether or not the case should proceed.