WTHR blackout on DirecTV, U-verse drags on with Colts game, fall premieres looming

Indianapolis Colts fans might not feel much empathy for Green Bay Packers loyalists who live in Indianapolis, but they should take note of Stephanie Daily's plight. They soon might share it.

Daily, 44, of Indianapolis, pays nearly $300 a year for the NFL Sunday Ticket package on top of a $180-a-month DirectTV subscription to make sure she never misses a Packers game. Those subscriptions have allowed her to watch the Packers without interruption for more than a decade — until this past weekend when the Packers played the Atlanta Falcons on "Sunday Night Football."

NBC affiliate WTHR-13, which airs "Sunday Night Football," is blacked out on AT&T Inc.-owned DirectTV and U-verse because of a contract dispute. That means hundreds of thousands of Indianapolis-area television subscribers are missing out on NBC programming.

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This past week, it was Packers and Falcons fans who were angry. But, on Oct. 1, it's going to be Colts fans scrambling to find a way to watch their team play on "Sunday Night Football." If AT&T and WTHR parent company Dispatch Broadcast Group don't come to terms on a new contract in the coming days, the blackout could turn some Indianapolis TV subscribers into cord-cutters.

Daily found a way to watch the Packers game through a streaming service — an over-the-air antenna won't work at her east-side home, she said — but the experience has left her questioning why she keeps paying so much money to TV providers at a time when blackouts are becoming more common.

"Frankly, the cost is crazy and I don't know if I want to stay with DirectTV even though I've been with them forever," she said.

The nearly two-week-long contract dispute between Dispatch and AT&T is threatening to go from mild annoyance to infuriating for viewers who could be blocked from accessing some of NBC's most popular fall programming. In the next two weeks, NBC is scheduled to air the season premieres of hit shows "The Voice," "This is Us" and "Saturday Night Live," as well as the Oct. 1 "Sunday Night Football" game between the Colts and Seattle Seahawks.

Columbus, Ohio-based Dispatch on Sept. 6 pulled WTHR and Columbus CBS affiliate WBNS off of DirecTV and U-verse because of a dispute over what's known as retransmission fees. Television providers pay the fees, which are negotiated every three years, to broadcast television station owners for the rights to transmit over-the-air channels. WTHR's contract with AT&T expired in August.

WTHR General Manager Larry Delia said the station's owner is asking for a deal that is in line with what other broadcasters receive.

"We are a small, family-owned broadcaster with two TV stations and we simply seek fair market value for our product," Delia said. "That has not been offered to us. This could be cleared up if (AT&T) simply offered us a fair and reasonable number."

Delia declined to disclose the retransmission fee in WTHR's previous contract or say what the station is asking for.

AT&T declined to answer questions, pointing to a previously issued statement that said blackouts "are typically the result of station owners seeking significant fee increases."

If past blackouts are any guide, the looming prime-time Colts game and return of other popular NBC shows could accelerate negotiations. The upcoming television events raise the stakes for AT&T and WTHR to complete a deal within days rather than weeks.

A similar contract dispute between Dish Network and Tribune Media was resolved in September 2016, ending the threat of a Colts blackout on CBS affiliate WTTV-4. AT&T also reached a deal with Tribune on retransmission fees for WXIN-59 and WTTV-4 in time to avert a Colts blackout in 2015.

"What will often happen is some must-see event will come along that will force both parties to do something quickly," said Dom Caristi, a telecommunications professor at Ball State University. "Because (WTHR is) an NBC station, we're not so concerned about the Sunday NFL package, but we are concerned about 'Sunday Night Football.' So that might be the trigger that causes them to negotiate a little harder."

Delia did not offer a timetable for when WTHR could be back on DirecTV and U-verse, but acknowledged his station already has been receiving calls from angry viewers.

"Every program is pressure," Delia said. "Will (the Colts and NBC season premiers) put on more pressure? Possibly."

Fast-rising retransmission fees are leading to an increasing number of standoffs between TV providers and broadcasters, but they usually don't last for long. Research firm SNL Kagan estimated that broadcasters last year received an average retransmission fee of $1.40 a month per subscriber, a number that is projected to rise to $2.21 by 2022.

Blackouts, including WTHR's absence from AT&T providers, are on pace to hit an all-time high. There have been more than 150 broadcast network blackouts so far this year, most of which have been resolved in less than a month, according to the American Television Alliance. The record was 193 blackouts in 2015.

The disputes have caught the attention of lawmakers and regulators, said Barry Umansky, a telecommunications professor at Ball State University and former general counsel for the National Association of Broadcasters and attorney for the Federal Communications Commission.

"There are ongoing efforts now at the FCC and on Capitol Hill to review the current retransmission consent option for television stations," Umansky said. "There may be some changes to the regulatory regime in the not-so-distant future."

But it won't be soon enough to alter WTHR's talks with AT&T.

It's unclear how many people are affected by the WTHR blackout. TV providers keep subscriber and market share data private for competitive reasons.

DirectTV had more than 194,000 Indianapolis subscribers in 2015, according to a report by media consultant One Touch Intelligence. The report did not include numbers for U-verse.

The Indianapolis area has more than 896,000 households with subscriptions to TV providers, according to Nielsen data. That accounts for about 82 percent of households in the Indianapolis media market.

Caristi of Ball State said TV providers that lose customers to competitors during blackouts usually regain them over time. But, if some customers decide to give up cable and satellite subscriptions altogether because of the blackout, that could be part of a larger problem for AT&T.

"The station will lose some viewers that will slowly return and (AT&T) will lose some subscribers that over time they will get back," Caristi said. "Right now, they're more concerned about losing subscribers to the cord-cutters. That's the biggest concern."

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.