AT&T patrons may miss Cowboys

If you’re an AT&T customer in San Antonio, you might not be able to watch the Dallas Cowboys game Sunday.

AT&T and Tegna, a broadcasting company that owns over 60 TV stations around the U.S. including KENS 5, have remained at an impasse over so-called retransmission rates. Those are the fees that a TV station owner such as Tegna charges cable providers to air its stations.

The dispute caused Tegna’s stations, which cover 51 markets, to go dark for customers of AT&T platforms DirecTV, U-Verse and AT&T TV beginning Dec. 1.

In San Antonio, KENS 5 is the only affected station.

The Cowboys were originally slated to play Sunday night on NBC against the San Francisco 49ers. But both teams’ poor records this year led the NFL to instead move the Cleveland Browns-New York Giants game into that spot. That shifted the Cowboys game to a noon kickoff time Sunday — and bumped the game onto CBS-affiliate KENS.

Unless the dispute is resolved before Sunday, Cowboys fans in San Antonio won’t be able to watch the game on their TV sets.

The Houston Texans game Sunday against the Indianapolis Colts is also set to air on CBS and will be unavailable for customers of AT&T cable platforms. Tegna also owns KHOU, the CBS affiliate in Houston.

Both sides are blaming each other for the impasse.

AT&T has said Tegna is asking

for an excessive increase in the rate it charges. A spokesman said there was no update on negotiations.

On the other side, Tegna officials said they’ve been able to reach agreements with other broadcast providers and are seeking a “market-based agreement” with AT&T.

“Our viewers shouldn’t miss another weekend of NCAA and NFL football, not to mention their local news, weather and sports updates and their favorite network programming,” Tegna spokesperson Anne Bentley said. “The solution to this situation is a fair deal based on the market. If AT&T is willing to negotiate in good faith, we are confident we can get a deal done quickly.”

As viewers have increasingly gone from traditional television viewing to online streaming, advertisers have shifted dollars away from cable and broadcast TV toward the internet.

In the first quarter of 2020, U.S. viewers age 18 and older on average watched about four hours and 16 minutes of traditional TV per day. That was

down 10.5 percent, compared with just two years ago, in early 2018, Nielsen data shows.

As a result, TV station owners have sought to replace lost advertising dollars by increasing retransmission rate fees on cable providers, according to Victor Kao, a senior analyst of media and telecommunications at consulting firm RSM.

Kao found that total retransmission rate fees are projected to continue growing in the coming years. By next year, cable and satellite providers such as AT&T could be paying about $11 billion in retransmission fees, up from $10 billion in 2018.

“It’s hard to make money off of (live TV) anymore,” Kao said. “It’s such thin margins, and a lot of that is because the cost of retransmission fees and the cost of broadcasting content live is becoming more and more expensive.”

Kao said Tegna and AT&T need each other to make the cable business model work in the age of streaming. He expects them to reach an agreement, but he likened it to a game of chicken.

Moving forward, Kao expects blackout disputes

between television station owners and cable and satellite providers to become more common. But he said broadcasters such as Tegna should find a way to update their business model, rather than replacing shrinking ad revenue with higher retransmission fees.

“They need to think about pivoting and pivoting quickly,” Kao said. “If anything, these broadcasting (companies), they have to figure out a new medium or a new format to get folks more interested in their platform, or they’re going to have to shift to something different.”

As the negotiations between Tegna and AT&T carry on for now, viewers have a couple of options.

Football fans can watch NFL games on a cellphone for free by downloading the Yahoo sports app. They can’t use Wi-Fi to stream the games, however, so they’ll have to have a cellular data plan to watch on Yahoo.

AT&T customers also can view some KENS programming on kens5.com or cbs.com, as well as on the CBS mobile app.