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“The Walking Dead” network alleges it has been put in a competitive disadvantage compared with the networks AT&T acquired through its merger with Time Warner, including TBS, TNT and HBO. In a 176-page complaint filed on Wednesday, AMC said AT&T has “disproportionate bargaining power” that can “unlawfully disadvantage a programming competitor.”
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FOX Business reached out to AMC Networks for comment but representatives at the company did not immediately respond at the time of publication.
However, AMC’s complaint shows that the network takes issue with AT&T “increasing what it pays its own networks” in terms of license agreement-related annual service fees.
As an example, the network cited AT&T’s investment in HBO’s programming as a major cause for concern.
“AT&T has made it extremely clear recently that, far from reducing its networks’ budgets, it is substantially increasing them, so that they can compete fully in the ongoing war for content,” the redacted complaint, which cited a report from Variety, reads. “In 2019 alone, AT&T spent a whopping $14.2 billion on original content, and HBO ‘expanded its production of original content by 50%, to 150 hours,’ to the tune of ‘about $1.5 billion.’”
A year prior, HBO reportedly spent around $2.2 billion on content, the complaint added.
Being paid less than AT&T's networks in licensing fees has led AMC to conclude that AT&T’s business moves are being motivated by discrimination given that AMC characterizes itself as a “must-have network.”
AMC's affiliation agreement with AT&T and DirectTV is set to expire on Aug. 31, according to a Pre-filing Notices of Program Carriage Violation it filed on July 22. The paperwork argues that AMC is in a position where it could be forced to cave to AT&T’s fee reductions and other demands it is using in negotiations such as restricting where AMC distributes its content.
“By ... barring AMC from distributing its networks either directly to consumers or by making them widely available through online video platforms, AT&T is interfering with AMC’s ability to generate revenue and remain relevant to today’s consumers,” the document states. “Given that AT&T does not impose these restrictions on its own networks, such behavior is a flagrant attempt to give AT&T’s own networks a completive advantage over AMC’s networks.”
AT&T, on the other hand, refutes that it is treating AMC unfairly. In a statement provided to FOX Business, the media giant said its business decisions regarding AMC are largely due to a shifting consumer base.
“AMC Networks’ complaint is without merit. We treat all programmers fairly and will continue to work with AMC Networks to provide its content at a price that is reasonable to our customers," an AT&T spokesperson wrote. "But, the cost to provide that programming should reflect that AMC Networks’ shows have been declining in popularity as compared to their peers for several years. AMC’s plea to the FCC doesn’t acknowledge our TV services collectively represent only 15 percent of U.S. television households, and in nearly every market across the country, consumers have two or more competing options that carry AMC Network’s portfolio of channels.“