AT&T Accused of "Unfair" Behavior in A+E Networks Carriage Standoff

Paul Buccieri Headshot - P 2014

Paul Buccieri Headshot - P 2014

A+E Networks Group president Paul Buccieri on Saturday wrote to employees about a tense standoff with the DirecTV owner as Lifetime, History and A&E channels threaten to go dark on Tuesday.

A&E Networks Group president Paul Buccieri on Saturday accused AT&T, which owns DirecTV and WarnerMedia, of anti-competitive behavior as talks on a new carriage deal have reached a tense standoff, ahead of an April 30 deadline for a new deal.

"Having recently acquired WarnerMedia, AT&T appears intent on using their new position to gain an unfair advantage for their own channels," Buccieri said in an internal message to A&E Networks Group employees that The Hollywood Reporter has secured.

In a corporate video, A&E also warns that "AT&T DirecTV customers may never experience our stories again" as its channels are threatened with a possible blackout. DirecTV customers are then urged to "let your voice be heard" by calling a phone number or going online for more information about the carriage dispute.

The latest impasse with AT&T follows Viacom also accusing the telco giant of anti-competitive behavior in its own earlier carriage talks that threatened to leave DirecTV subscribers without the MTV, Comedy Central and Nickelodeon channels. AT&T recently pulled the NFL Network and RedZone Channel from its U-verse and DirecTV Now offerings over yet another carriage dispute.

Buccieri cited earlier concerns in the wake of its Time Warner deal that AT&T might gain enough leverage in the market to unfairly harm consumers or rivals during its recent fight with the U.S. government to secure regulatory approval for the transaction. 

During its court fight with AT&T, the Department of Justice argued the telco giant, in its ownership of Time Warner, would have bargaining leverage in affiliate negotiations. The U.S. government argued CNN, TBS and TNT would also be owned by an AT&T looking to attract subscribers to its own channel properties.

The U.S. courts ultimately allowed the huge merger between AT&T and Time Warner, which has been renamed WarnerMedia, to go ahead after ruling the government had failed to prove that the nation's largest telecom stood to gain undue control over CNN, TBS and TNT with leverage that would harm the marketplace.

"Millions of households could be impacted and deprived of their favorite programming if AT&T does not carry our networks on their platforms," Buccieri warned as AT&T faces yet another carriage dispute with a content supplier.

The exec did not reveal details of the impasse with AT&T, but it is understood to hinge on carriage fees, with the telco giant holding the upper hand in the ongoing negotiations.

The A&E Networks Group boss said the two sides were "far apart from reaching a deal," with Buccieri insisting his side wanted "fair market terms."

In its own statement, AT&T said, "We're disappointed to see A&E put our customers in the middle of their negotiations. We are on the side of customer choice and value and want to keep these channels in our customers' lineups. We hope to avoid any interruption to these channels that some of our customers care about. Our goal is always to deliver the content our customers want at a value that also makes sense to them. We've always fought to get the best deal for our customers, delivering the content they want at a great value. We'll continue to fight for that here."

"While I have respect for them and our long-standing relationship, AT&T has not demonstrated a willingness to negotiate reasonably," Buccieri insisted in his internal memo.

AT&T is understood to be looking to cut carriage fees as it looks to pay down its debt, which has grown to $171 billion — or $40 billion net of cash — since acquiring Time Warner and renaming the asset.

With its latest financial results, AT&T pointed to the loss of another 83,000 subscribers at its DirecTV Now streaming service, following a previous 267,000-subscriber drop in the prior quarter, amid continuing cord-cutting and a shift in TV audiences online.

Read Buccieri's memo below. 

Dear Team,

Sorry to interrupt your weekend, but, I wanted you to hear this from me directly. Every day, thanks to your creativity, talent and dedication, our networks deliver some of the best programming on television and serve audiences in unique and thoughtful ways. Whether it’s giving women a voice like the recent Surviving R. Kelly; building transparency around law enforcement through Live PD or any number of the groundbreaking HISTORY series — like The Curse of Oak Island or Project Blue Book — the A+E Networks brand of storytelling is distinctive for our viewers. Consumers have more options than ever, and they choose us by the millions because they find programming and community around our content that is meaningful and original.

It is a privilege to create content for our viewers. It is our passion. It is also our business. As a business, content has value. We have a responsibility to our stakeholders to get equitable value for our content, for your efforts and the creative community. Now more than ever, we must protect the value of creativity and content. Most of all, we owe it to our viewers to ensure we are here for them, investing in the programming they love and rely on us for.

Running our business the right way requires negotiating fair deals with distributors that deliver our programming into viewers’ homes. We have done this without our portfolio being removed from any distributor’s platforms. Few of our peers can make the same claim.

Right now, we are in the midst of one such negotiation with AT&T, which owns DIRECTV, and with our contract deadline approaching, we are still far apart from reaching a deal. While I have respect for them and our long-standing relationship, AT&T has not demonstrated a willingness to negotiate reasonably. The deal we are seeking is based on the same fair market terms that have allowed us to reach deals with numerous other providers. AT&T simply has not yet demonstrated that they recognize the value of our programming and the high regard we have for our viewers — including AT&T’s own customers.

Having recently acquired WarnerMedia, AT&T appears intent on using their new position to gain an unfair advantage for their own channels. Many, including the U.S. Department of Justice, were concerned that AT&T would have the ability and incentive to discriminate against programmers like A+E Networks and others like us. It seems that concern has become a reality.

Millions of households could be impacted and deprived of their favorite programming if AT&T does not carry our networks on their platforms. Therefore, we will soon start communicating with all of our stakeholders about this situation, including our viewers.

For the last 35 years, the A+E Networks brands have played a significant and influential role in American popular culture — from the vital perspective found on HISTORY, to the ever enduring and iconic Lifetime movie to reimagining reality and reinventing live storytelling on A&E. We remain hopeful that, at the end of the day, AT&T’s focus like ours will put their consumers first.

I realize that many of you, as well as your families and friends, may be AT&T or DIRECTV subscribers. Please feel free to share a link to http://www.keepmychannels.com, which will be updated with relevant news and information.

We will continue to keep you apprised of any updates. In the meantime, the executive team and I ask that everyone remain laser focused on doing what you do best: delivering amazing stories, told with the kind of heart and passion that is definitively A&E, HISTORY, Lifetime and all of A+E Networks.

Sincerely,

Paul