As Optimum and Tegna’s carriage deal nears expiration at the end of the month, the telecommunications company slammed the service provider on Tuesday for imposing “egregious fee increases that are divorced from market reality,” TheWrap has exclusively learned.
Among the alleged price hikes are a 30% increase for Tegna’s major network affiliates and a 50% increase for the CW.
Optimum argued that Tegna’s pricing strategy “ignores the current media landscape, where consumers demand value and flexibility.” It also said it’s creating a “total disconnect between cost and value” and that the current programming model is “broken and outdated.”
“Tegna is operating as if the market hasn’t changed in 20 years and its request is nothing short of egregious. Broadcasters cling to an outdated, restrictive and now irrelevant business model that places upward pressure on customer bills, forces them to pay for content they don’t watch, and deprives consumers of the choice they expect, and frankly, deserve,” Optimum’s President of News, Programming and Business Services Keith Bowen said. “Enough is enough. Tegna’s proposal isn’t just unrealistic, its predatory. We will not stand by while broadcasters and programmers attempt to use our customers as blank checks.”
Representatives for Tegna did not immediately return TheWrap’s request for comment.
The allegations against the broadcaster came as its pending $6.2 billion merger with rival Nexstar Media Group awaits regulatory review. Under the terms of the deal, Nexstar and Tegna will have a combined portfolio of 265 television stations in 44 states and the District of Columbia. They would also have stations in nine of the top 10 markets, and in 41 of the top 50.
Optimum said that the companies are “rapidly contracting into a duopoly” and that the deal exposes “the dark side of broadcaster consolidation.”
“Tegna is attempting to lock in skyrocketing rates now, effectively forcing Optimum’s constituents to pre-pay for a merger that will only reduce their choices. Optimum is taking this stand not just for today, but to stop a trend where broadcasters use the threat of blackouts to fund their takeover sprees. As broadcasters race to consolidate, they are leaving the consumer behind,” Bowen added. “Optimum urges policymakers to look closely at how these rate demands serve as a precursor to anti-competitive behavior.”
Optimum has asked Tegna to enter into “good-faith negotiations” ahead of the expiration of their current contract’s expiration on Dec. 31 at midnight.
“Optimum looks forward to working with partners who understand the realities of today’s economy and consumers’ viewing habits — partners who recognize that the days of holding viewers hostage for higher fees, on both major and minor networks, are over,” Bowen concluded.
