CBS Warns DirecTV, AT&T U-Verse May Drop Network

Some of CBS Corp.’s biggest stations and its flagship network could be dropped from AT&T’s various cable and satellite services if a carriage agreement between the companies is not reached by July 19.

“CBS has reached timely, fair agreements with hundreds of other cable, satellite, telco and internet providers to carry our industry-leading, fan-favorite programming,”  CBS said in a statement Tuesday.” AT&T, however, continues to propose unfair terms well below those agreed to by its competitors and may drop CBS unless we agree to those terms.”

DirecTV serves around 22.4 million traditional TV customers and 1.5 million subscribers to DirecTV Now, its live-streaming service, AT&T disclosed in April. AT&T is already involved in a similar dispute withTTV-station owner Nexstar, which has not had its programming transmitted via DirecTV or U-Verse for a few weeks.

AT&T has come under pressure to shed as much as $170 million of debt, after spending $85.4 billion to buy the company once known as Time Warner. The telecommunications giant has in recent months offered buyouts to employees of HBO and CNN, and witnessed an exodus of some of the top executives who once managed its new acquisition.  CBS, meanwhile, is increasingly reliant on cable and satellite distributors to get its content out to millions of couch potatoes who watch programs ranging from “NCIS” and “Young Sheldon” to “The Late Show with Stephen Colbert” and Sunday-afternoon NFL games.

“CBS would like to avoid being dropped, but unless an agreement is reached, our viewers should be prepared for DirecTV and AT&T U-verse TV to remove CBS-owned television stations in New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Boston, Atlanta, Tampa, Seattle, Detroit, Minneapolis, Miami, Denver, Sacramento, Pittsburgh and Baltimore at 11:00 PM, PT on July 19,” CBS said. “DirecTV Now customers nationwide would lose the CBS Television Network’s hit programming as well.”

But AT&T said in a statement that it was taking a stand against broadcast stations that were hanging on to old ways of doing business. “Broadcast stations are the incumbents to our industry, and many feel they deserve certain entitlements. They continue to give their signals away for free but also demand unsustainably growing fees for allowing customers the convenience of receiving their channels in a usual program guide or without switching an input,” the company said.

Earlier this year, AT&T entered into a similar situation with Viacom Inc., which, like CBS is controlled by the Redstone family through their movie-exhibition chain National Amusements.  While the contract between the companies expired, they were able to hammer out a new deal after the deadline – but not in time to keep Viacom from running ads and promotions telling subscribers that Nickelodeon kids programming and the late-night program “The Daily Show” were in danger of being dropped.

Carriage battles between programmers and cable and satellite distributors have ratcheted in recent years as more consumers opt for narrower services delivered via broadband.

Meanwhile, AT&T urged its customers to use a free preview of “CBS All Access,” the CBS streaming-video service, to gain access to CBS favorites, to use new apps that allow for streaming of local broadcasts, or to watch the websites of various CBS stations.

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