UPDATE 1-DirecTV sues Nexstar, station owners over retransmission fees

(Adds Nexstar comment)

By Jacqueline Thomsen

March 14 (Reuters) - Satellite provider DirecTV on Tuesday sued Nexstar Media Group Inc and two other television station owners in Manhattan federal court, claiming they violated antitrust law by scheming to drive up retransmission fees for stations broadcasting the four major networks.

The lawsuit seeks an order blocking Nexstar, the largest local TV station owner in the United States, from allegedly colluding with Mission Broadcasting Inc and White Knight Broadcasting Inc in fee negotiations with DirecTV.

Pay-TV providers pay retransmission fees to station owners to broadcast their content. DirecTV's lawsuit said the defendants deprived it "of a fair competitive process that has resulted in higher prices being demanded of it and lost profits," according to a redacted version of the lawsuit seen by Reuters.

Nexstar spokesperson Gary Weitman said DirecTV's claims were "without merit" and the company would fight them in court. He said its agreements with the station groups complied with U.S. Federal Communications Commission guidelines.

A Mission representative did not immediately respond to a request for comment. A representative for White Knight could not immediately be reached.

Twenty-seven stations owned by Mission and White Knight have been unavailable for DirecTV customers since October 2022 after they failed to agree on retransmission fees. Nexstar is expected to renegotiate its retransmission agreements with DirecTV, which is 70% owned by AT&T, possibly by later this year.

The lawsuit said that by conspiring to set retransmission fees, the station groups forced providers and their customers "to pay supracompetitive prices or lose access to the most popular broadcast television programming."

The lawsuit claims that Nexstar, which previously owned Mission and White Knight's stations, still retains the ultimate economic interest in the stations even though they are supposed to be independent.

Michael Hartman, DirecTV's general counsel, said it decided to sue in order to "bring some transparency" to what it calls anticompetitive conduct. (Reporting by Jacqueline Thomsen in Washington Editing by David Bario and Matthew Lewis)