The dispute went public earlier this week, with the usual exchange of harshly worded statements.
The carriage contract between CBS stations in more than a dozen markets, including New York and LA, and AT&T-owned satellite giant DirecTV, DirecTV Now and U-verse cable systems officially expired Friday at 11 PM PT. The fight comes at the same time that dozens of local stations owned by Nexstar are also at an impasse with AT&T, leaving those stations dark for the past two-plus weeks.
Programming on CBS at this point is hardly setting viewership records, but the longtime leading broadcaster in terms of total viewers remains a powerhouse, especially when football season kicks in. NFL and SEC college games return in early September.
AT&T Accuses CBS Of Trying To “Up-Sell” Pay-TV Customers To CBS All Access
In a lengthy statement Friday morning, AT&T said it has “offered to pay CBS an unprecedented rate increase and the highest fee we currently pay to any major broadcast network group. CBS has refused.”
It further claimed that CBS was refusing to allow AT&T to offer CBS All Access, the subscription streaming service, in the manner that Amazon, Apple and Roku do. The telecom giant therefore concluded that CBS was trying to “upsell” pay-TV consumers, forcing them to pay $6 or $10 a month for All Access for either the limited-advertising or no-advertising version.
CBS has not offered a comment on that assertion.
Earlier this week, CBS said AT&T had proposed “unfair terms” that were “well below those agreed to by its competitors.”
A person familiar with the negotiations told Deadline the expiring contract ran for seven years, an eternity by today’s fast-evolving pay-TV standards. In 2012, when that deal would have begun, millions more customers were paying for traditional bundled TV packages and stand-alone streaming services barely existed.
Further complicating the picture for AT&T is its $81 billion acquisition of Time Warner, which closed in mid-2018 and left the company with $170 billion in long-term debt at the end of last year. AT&T has methodically been cutting costs and eliminating large chunks of that debt, with executives promising to return to normal debt levels within the next two to three years.