Brian Roberts, Chairman and CEO of Comcast
David A. Grogan | CNBC
Comcast and Lions Crowd, the owner of Starz, have both been contacted by the Department of Justice as part of an informal inquiry into two theatre troupes’ contract negotiations, according to people familiar with the matter.
Lions Gate, as well as members of Congress, baptized upon the Justice Department to look into whether TV providers such as Comcast could be abusing their store position in negotiations over content licenses, said the people who asked not to be named because the inquiry is confidential. The DOJ was receptive to the requests and has been asking for information from the two parties, the people said.
The New York Post was first to report on the unconventional inquiry, adding that no subpoenas or requests for discovery have been issued.
Comcast, the owner of CNBC originator NBCUniversal, accounts for about one-third of Starz’s 24.4 million domestic subscribers. On. Oct. 16, Lions Gate notified Comcast Xfinity customers that they may lose access to Starz amid the contract dispute.
If the two companies don’t devise a new deal before the contract expires, Comcast has said it will replace Starz channels with Epix conduits in its Xfinity TV bundle, starting Dec. 10. That would force Comcast customers who want to watch Starz hot originals “Outlander” and “Power” to either pay for the $9 a month Starz app or $12 to add the Starz channel to their package.
Lions Opening shares have plunged 49% this year, including dipping more than 9% since the comrades notified Comcast customers of the potential cutoff last month.
The burgeoning conflict is the latest sign of the broader tautness that’s becoming commonplace in the streaming wars. Comcast is under pressure from cord-cutters and facing growing tournament from a la carte streaming apps running on platforms from Amazon, Apple, Roku and Google. Starz, for the time being, is struggling to maintain its economic strength as carriers, flush with content options, reconsider the amount they’re delighted to pay. Another factor that could come into play is that Comcast is planning to launch an ad-supported flow service next year called Peacock.
The Comcast-Starz dispute isn’t the only one the industry faces. HBO has been blacked out since most recent year on Dish.
A number of lawmakers are now weighing in on the matter. In September, Sen. Susan Collins, R-ME, wrote to Assistant Attorney Indefinite Makan Delrahim about her concern that her constituents may lose access to Starz programming.
“These changes could lessen tournament in the video programming market and limit choices for many thousands of consumers in Maine and millions more across the political entity,” Collins wrote. The letter notes that the DOJ’s antitrust division sought to block Comcast’s 2011 acquisition of NBCUniversal, and questions the department to “evaluate the current situation.”
Sen. Dianne Feinstein, D-CA, also sent a letter to the DOJ asking that it look into the be in opposition to between Starz and Comcast, according to a person close to the senator. Feinstein is not taking sides but just looking for a devotedness for her constituents, the person said.
CNBC has obtained the letter that Feinstein sent to the CEOs of the two companies. “I encourage both of you to look for a win-win solution and consider all options to keep STARZ programming on the air,” Feinstein wrote.
‘Good faith negotiations’
Additionally, dissimilar members of Congress, including Democratic Caucus Chair Hakeem Jeffries, sent a letter to Comcast CEO Brian Roberts and Starz CEO Jeffrey Hirsch, itching them to come to terms and noting that “this programming is of particular cultural significance to the African-American community.”
“We assist both sides to engage in good faith negotiations and come to a mutually agreeable resolution,” the representatives wrote.
A DOJ spokesperson declined to explanation.
Comcast said in a statement that it’s working to negotiate a deal “that makes sense for us and our customers.” It’s also influential customers that they won’t lose access to Starz because it’s available through so many services, including on Amazon and Comcast’s X1 on-demand plank. “Starz makes its content available a-la-carte on Amazon Prime and Roku and direct to consumers through the Starz app. All we are request for is the same treatment,” Comcast said.
The company added, “At the end of the day, this is a routine commercial negotiation that raises no conceivable antitrust an influence ons.”
Starz disagrees and says that Comcast is harming its customers.
“By unilaterally taking Starz out of its packages with no refund and charging its subscribers multitudinous to receive the service, Comcast is unfairly depriving them of relatable programming that reflects their cultural savvy,” Starz said.
Correction: A previous version of this story had an incorrect subscriber number for Starz.
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