AT&T Lawsuit vs. Consultant Is New Weapon in Retrans Wars

The retransmission-consent wars are intensifying with the war of words between AT&T and Nexstar Media Group heating up and with AT&T launching a legal battle against Max Retrans, a consulting firm that works with smaller station groups and is headed by former Nexstar chief operating officer Duane Lammers, known as The Hammer.

In a lawsuit filed in federal court in St. Louis, AT&T charges that Max Retrans is using confidential data from negotiations with individual station groups to get higher fees for its other client groups despite a nondisclosure agreement.

AT&T is seeking damages based on how much more money it is paying stations in retrans fees, because Max Retrans is leveraging what it knows about AT&T’s contracts with other broadcasters.

Lammers did not respond to a request for comment, but passed the request along to Armstrong Williams, owner of Howard Stirk Holdings, one of the small broadcasters working with Max Retrans.

Stirk was also among a number of broadcasters currently blacked out on AT&T’s DirecTV satellite platform that was named in an earlier lawsuit by AT&T, which charges the station groups have not been negotiating in good faith.

Williams accused AT&T of wrongfully using litigation as a weapon “to intimidate broadcasters and their agents from negotiating fair and market-based retransmission rates.”

AT&T is using its power as a gatekeeper against stations to limit viewer choice, Williams added. In the case of WEYI, Flint, Michigan, and WWMB, Florence, South Carolina, it’s stifling some of the handful of African-American-owned stations in the country.

“AT&T should stop throwing tantrums and trying to bully broadcasters and their agents, like Max Retrans, and instead return to the negotiating table and behave like adults,” Williams said.

In its lawsuit, AT&T claims Max Retrans’s use of trade secrets is resulting in delays in retrans negotiations, leading to AT&T losing subscribers.

AT&T will also be harmed by Max Retrans’s “misappropriation of trade secrets by paying higher retransmission consent fees,” the suit said.

Despite Lammers’s background, Max Retrans is not involved in Nexstar’s carriage dispute with AT&T, which has resulted in a week-plus blackout of about 120 stations and an increasingly acrimonious war of words that has attracted the interest of elected officials.

In a statement, Nexstar accused AT&T of a “misinformation campaign,” insisting that it offered the telco a 30-day extension that was rejected. Nexstar also said it has renewed more than 390 distribution agreements with cable providers over the past 20 months.

“In contrast, following its 2015 acquisition by AT&T, DirecTV has been routinely involved in disputes with content providers,” Nexstar said, adding, “a little more than a year after putting DirecTV together with Time Warner, AT&T appears intent on using its new market power to prioritize its own content at the expense of consumers, and insisting on unreasonable terms that are inconsistent with the market.”

Nexstar’s extension was conditioned on getting retroactively paid a new, higher rate, AT&T said.

“AT&T has been ready to negotiate since Nexstar removed its stations more than a week ago,” the company said. “As we enter the second week of their blackout of our customers [at press time], Nexstar has canceled our scheduled meeting for Friday [July 12] and it now has been rescheduled for Saturday [July 13].”

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.