AT&T Says CBS No Longer Talking, But Still Optimistic On A Deal


AT&T has now provided an update on its ongoing dispute with CBS.

The update came in response to a question asked during the company's second quarter earnings call with AT&T's Randall Stephenson basically stating that the issue is now firmly in the hands of CBS.

Stephenson specifically stated that it sent over its offer over five days ago and since then the company has heard nothing back from CBS. In AT&T's words, "it has been crickets" when it comes to communications between the two and this has left AT&T in the "dark."


The comments were padded out with Stephenson indicating this might just be a timing issue, suggesting CBS may have been too busy dealing with other agreements to have responded yet, instead of the CBS silence necessarily being a reflection of its thoughts on AT&T's offer.

For those unaware, last week CBS warned AT&T video customers, including DIRECTV NOW users, that there was a chance the channels it owns could suffer a blackout if an agreement was not reached soon.

The deadline for that agreement was last Friday and a deal was not done in time resulting in a blackout that affects DIRECTV and U-verse customers in select areas, and DIRECTV NOW on more of a nationwide scale.


Along with an update on the CBS situation, AT&T also provided more insight into the dispute it is also currently having with Nexstar. In comparison to CBS, AT&T states it and Nexstar are much further apart when it comes to what both companies feel is the appropriate value and subsequent cost of accessing channels owned by Nextstar.

Stephenson clearly indicated that it expects the Nexstar situation to not be settled anytime soon and certainly not before the CBS situation.

While customers on all of the video services were impacted by the CBS dispute to some degree, arguably DIREСTV NOW subscribers were the most impacted and the timing for those customers could not of come at a worse time due to DIRECTV NOW already struggling to maintain subscribers.


Prior to today, the official numbers highlighted that DIRECTV NOW had lost 350,000 subscribers in the previous two quarters. That number rose further today following AT&T's confirmation that another 163,000 subscribers had departed the service in the last quarter alone.

These losses came long before the current disputes with CBS and Nexstar took effect and while it is expected that more subscribers will leave DIRECTV NOW during the current (third) quarter, the company might find the number expected increases further if a deal is not able to be met in due course.

This is truer in the case of CBS as Stephenson pointed out in the earnings call that the issue with Nexstar does not seem to be affecting its DIRECTV NOW customers as much as it might have before. Nexstar primarily provides AT&T with access to local channels and Stephenson noted that since the channels affected when dark, its customers have found alternate ways to access those same channels.


This is likely to be another factor in the negotiations and one that further impacts on AT&T's view of the value associated with Nexstar's contribution to its service.

CBS is another story, and on that topic Stephenson said he was "optimistic" the issue will be resolved soon.