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Scripps, AT&T Tussle Over Video Rights Keeps HGTV, Food Network Off U-Verse

Update: Scripps Networks (NYSE: SNI) and AT&T (NYSE: T) U-Verse reached enough of an agreement Sunday to put the networks back on the air. No details about how they resolved their differences although from the statement it appears that AT&T got at least some of what it wanted in terms of enhanced video rights across platforms.

Original: Once again this year, HGTV and The Food Network are missing from millions of subscribers lineups — but this time it’s not about money says the programmer. Scripps Networks says it is balking at AT&T U-Verse demands for broad video rights. AT&T’s perspective: Scripps wants a premium price for “inferior access” to content across platforms. The dispute also affects the DIY Network, Cooking Channel and Great American Country.

In a press release, Scripps said it had offered a third extension to AT&T early this morning to keep the networks on the air for 2.7 million subs through the end of the year.

In the release, John Lansing, Scripps president, said the company “reached an agreement in principle with AT&T U-verse on the distribution fees we would receive for these networks well in advance of last month’s contract deadline.” The sticking point, he said, was that AT&T:

“demanded unreasonably broad video rights for emerging media where business models have not even been established. Accepting their demands would have restrained our ability to deliver our content to our viewers in new and innovative ways.”

AT&T’s words are different but the gist is very similar: by refusing the kind of deal it wants, Scripps is hurting the telecom’s own innovative business model. And for AT&T, it is about the money — the price for content equation.

From the AT&T statement:

Unfortunately, this is yet another example of a network punishing its own viewers for leverage in programming negotiations. Scripps Networks is demanding that AT&T pay double what other competitors pay – including smaller-sized affiliates – and has yet to provide a proposal that gives AT&T a choice in the channels we carry and pay for, despite repeated requests.

Scripps Networks also wants this premium price for inferior access to their content for our customers on other platforms, even though other competitors get this at much lower prices. With such an uneven playing field, they are harming AT&T’s ability to provide customers with a new video choice.

More to come.

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