The US Department of Justice is suing DirecTV, a subsidiary of AT&T, in Los Angeles courts for allegedly colluding with other cable networks, including Cox and Charter, during negotiations over broadcast rights for LA Dodgers’ baseball games, according to Bloomberg.
Justice Department alleges that DirecTV worked with Cox Communications, Charter Communications, and AT&T to ensure that DirecTV would be the only carrier to bid on rights to SportsNet LA, the TV channel that broadcasts the Dodgers games, in negotiations with Time Warner, the LA Times reports. The Dodgers also own the channel, and Time Warner owns the rights to distribute it. AT&T did not own DirecTV at the time.
AT&T recently made an $85 billion bid for Time Warner, which owns high-profile channels like HBO and CNN. The deal is likely to face challenges from federal regulators; the Justice Department’s suit against AT&T will not likely help the telecommunications giant’s acquisition efforts.
In a prepared statement sent to BuzzFeed News, AT&T’s general counsel David McAtee said, “The reason why no other major TV provider chose to carry this content was that no one wanted to force all of their customers to pay the inflated prices that Time Warner Cable was demanding for a channel devoted solely to LA Dodgers baseball. We look forward to presenting these facts in court.” McAtee also said the alleged violation occurred before AT&T’s acquisition of DirecTV.
The Department of Justice did not immediately respond to requests for comment.
Opponents of the AT&T-Time Warner merger recall Comcast’s similar 2011 takeover of NBC/Universal as a failure of the Obama administration. “Distribution companies and content companies should not be allowed to merge,” Barry Lynn, a senior fellow at the progressive New America Foundation, previously told BuzzFeed News. “AT&T would never have dared propose this deal had the Obama Administration not erred fantastically in approving the Comcast takeover of NBC/Universal.”