DirecTV drops Newsmax in carriage dispute

Pay TV provider DirecTV has dropped conservative news channel Newsmax from its satellite systems, DirecTV Stream and U-Verse, after the parties were unable to reach terms for a new agreement. The move comes amid blowback from some House Republican lawmakers, who have accused DirecTV of trying to stifle conservative views by not carrying the network.

Newsmax and certain House Republicans had already questioned DirecTV’s motive for potentially dropping the channel, ahead of the move once the contract expiration at 11:59 p.m. EST on Tuesday, January 24. However, DirecTV, for its part, has rebuffed notions that it’s intentionally limiting conservative views, instead suggesting it all comes down to business, as Newsmax was requesting higher carriage rates that would’ve been passed through as increased costs to customers.

“On multiple occasions, we made it clear to Newsmax that we wanted to continue to offer the network, but ultimately Newsmax’s demands for rate increases would have led to significantly higher costs that we would have to pass on to our broad customer base,” a DirecTV spokesperson said in a statement to Fierce Video. “Anyone, including our customers, can watch the network for free via, and on multiple streaming platforms like Amazon Fire TV, Roku, and Google Play. We continually evaluate the most relevant programming to provide our customers and expect to fill this available channel with new content.”

The decision not to carry Newsmax comes as the pay TV business is under significant industry and operations costs pressure, particularly in the face of rapidly increasing programming fees and continued cord-cutting. As DirecTV looks to save on operating costs it recently disclosed job cuts, slashing roughly 10% of its management workforce this month.

DirecTV has carried Newsmax since 2014 when the TV network launched, and historically at no cost to the programmer or customer. 

Ahead of dropping the network, Wesley Hunt, a Republican in the U.S. House of Representatives, sent a letter January 20 signed by more than 40 members of the House Republican Conference, to CEOs of DirecTV, AT&T and TPG Capital saying it was their understanding that the company “is moving to de-platform Newsmax by denying it cable fees on a fair and equitable basis.”

The letter cited DirecTV’s move last April to drop conservative network One America News Network, claiming it came after encouragement from Democratic members of the Energy and Commerce Committee. The letter also claimed DirecTV carries of “11 liberal news and information channels” – specifically calling out Vice Media, which the lawmakers assert “appears to receive higher fees than Newsmax is requesting despite having a fraction of the audience” based on Kagan estimates.

“Taken together, these two actions lead us to believe that DirecTV, one the nation’s largest Multichannel Video Programming Distributors, is actively working to limit conservative viewpoints on its system,” the elected officials wrote.

On Monday DirecTV responded to the letter, emphasizing that it would have liked to offer Newsmax programming on the same terms as its current contract and but could not reach an agreement after negotiating for months.

“Let me begin by assuring you in no way is DIRECTV working to limit conservative viewpoints. DIRECTV’s fundamental value proposition to its customers is to offer a wide variety of programming options at prices that match our customers’ pocketbooks,” wrote DirecTV general counsel Michael Hartman to lawmakers.

The crux of the disagreement, according to DirecTV’s letter, is that Newsmax wanted to change the existing deal model and is now requesting fees. According to DirecTV, it previously waived its typical right to sell two minutes per hour of Newsmax advertising time, which allowed the network to generate more revenue, and it agreed the network could be distributed on streaming platforms for no charge, including those that don’t have pay TV subscriptions. Those non-pay TV viewers represent 55 million households, or 40% of U.S. households, according to the letter.

“In effect, [Newsmax] has stated that if DirecTV and other Pay TV operators will pay it the fees it wants, then it will cease transmitting its current channel to the 55 million US households that don’t have a Pay TV service,” wrote DirecTV. “In other words, 55 million US households would no longer be able to access Newsmax in its current form unless they acquire a Pay TV subscription. Under this change in model, who’s doing the de-platforming? Certainly not DirecTV.”

DirecTV also implored the elected officials to keep Newsmax’s popularity in perspective. The letter cited Nielsen data as showing Newsmax’s nationwide average household audience as only 101,000, reflecting less than 0.1% of total TV households.

“That is 92% lower than Fox News. If Newsmax ceases to authorize our carriage of their channel, our customers will still have access to their clearly preferred conservative news channel, Fox News, which has more viewers than MSNBC, CNN and Newsmax combined,” wrote DirecTV.

DirecTV earlier this month notched a court win in a lawsuit brought on by One America News when a judge ruled in favor of the pay TV provider, determining it was well within DirecTV’s right to drop OAN and wasn’t required to renew a carriage deal.