7:36am PT by Eriq Gardner
Comcast Must Face Sports TV Antitrust Suit
A federal judge finds it "plausible" that Comcast is refusing to make a good offer to license Altitude, a regional sports network that telecasts most Denver Nuggets and Colorado Avalanche games, so that it can drive this Denver-area RSN out of business and capture the programming for its own NBC-branded sports channel. Accordingly, Comcast must continue to face an antitrust lawsuit.
The decision to partially reject Comcast's motion to dismiss came on Friday. It's the latest in a legal battle brought by Altitude's Stan Kroenke, who as owner of the NFL's Los Angeles Rams as well as the U.K.'s Premier League's Arsenal is a pretty powerful guy in his own right.
Here, the controversy surrounds Comcast's refusal to extend the old contract for Altitude for an additional few years with a modest bump in the carriage rate. Instead, Comcast wanted to move Altitude to a "sports tier" on the cable dial and make its subscribers pay an additional fee to get the channel. The result would lower Altitude's access to Comcast subscribers and mean less money. Altitude asserts that accepting Comcast's terms would ultimately oust it from the market and that Comcast has made no such arrangement with any affiliated RSN throughout the nation. In other words, Comcast is allegedly attempting to bully an independent, and as Altitude claims, take control.
U.S. District Court Judge William Martinez doesn't buy all of Altitude's antitrust theories. For instance, in his 41-page opinion (read here), he largely accepts Comcast's position that one of the monopolization claims is doomed because by not carrying Altitude, Comcast may be losing subscribers, which causes it to lose market power as a buyer of sports programming.
But the judge does see something worth exploring in Altitude's allegation that Comcast's hard bargaining position may amount to a refusal to deal instead of a legitimate effort to keep prices down.
"At least one court in the Tenth Circuit has observed that '[a] refusal to deal may cross the line from permissible to predatory, and therefore satisfy the second element of a monopsonization/monopolization claim, if its purpose is vertically to integrate into the supplier’s market,'" writes the judge. "Although Comcast characterizes Altitude’s allegations that it will enter the market with its own RSN as baseless and speculative, viewing the allegations in the light most favorable to Altitude, and drawing all reasonable inferences in Altitude’s favor, as the Court must at the dismissal stage, the Court finds Altitude has alleged facts sufficient to show that its allegations of anticompetitive conduct are plausible."
As noted in an earlier story regarding Comcast's motion to dismiss, the vertically-integrated media company has been wrestling with refusal-to-deal claims, and in fact, is currently attempting to get the U.S. Supreme Court to review the subject.