Nexstar’s allegations that Granite Broadcasting’s network affiliations and sales contracts...
Nexstar’s allegations that Granite Broadcasting’s network affiliations and sales contracts with other TV stations in the Ft. Wayne, Ind., market violate the Sherman Act because of the company’s local ad sales market power also raise concerns about the group’s retransmission…
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consent leverage, the American Cable Association said Tuesday. Nexstar sued Granite this week claiming the deal of Granite’s WISE-TV, which carries NBC and MyNetworkTV programming, to sell ads at ABC- and CW-affiliated WPTA-TV and WISE-TV’s Aug. 1 affiliation with the Fox network on a digital multicast stream will give it the ability to raise local ad sales rates in the market. Nexstar owns WFFT-TV Ft. Wayne, which has been the market’s Fox affiliate. With control of ad sales on all the major broadcast networks in the market, Granite “will also be able to deny valuable programming inputs to other Fort Wayne television stations by paying supra-competitive rates or other inflated consideration for key inputs -- rates that it will be able to subsidize through the charging of supra-competitive prices to advertisers,” Nexstar said in the complaint it filed against Granite in the U.S. District Court, Ft. Wayne, Ind. “Granite has already used this ability to recoup supra-competitive amounts to obtain the FOX network affiliation in Fort Wayne,” Nexstar said. Furthermore, Granite has been able to reach exclusive deals with advertisers, further hurting competing stations in the market,” Nexstar said. The consolidation of broadcast network distribution not only hurts advertisers “but it also means pay-TV providers in the market now will be subject to the unconstrained market power of the Fort Wayne triopoly or face a massive blackout … as soon as New Year’s Day of 2012,” ACA said. “As a sign of faith in the merits of its arguments that sharing agreements cause harm, Nexstar should cease coordinating retransmission consent negotiations with Mission” Broadcasting in the 13 markets where those two broadcasters have such agreements, ACA said. “While we agree with Nexstar’s lawsuit that breaks with its broadcaster brethren, Nexstar forms joint negotiating agreements itself,” it said.