Nexstar sues Comcast in Retransmission Dispute After Station Purchase

Texas-based local television company Nexstar Media Inc. has sued Philadelphia-based Comcast Cable Communications, LLC over alleged breaches of contract regarding retransmission of local New York television station WPIX. At issue was the parties’ retransmission consent agreement where cable television companies pay media providers for programming. 

The primary issue is whether WPIX satisfies contractual language of an “additional station,” which would require Comcast to pay Nexstar under their agreement. On Friday, the case was removed from New York state court to the Southern District of New York

The complaint alleges that Comcast breached the parties’ January 2020 retransmission consent agreement (the Comcast-Nexstar Agreement), which included provisions for future “additional stations.” The complaint also contends that under the agreement, both parties contemplated that WPIX might eventually become an “additional station.” 

Almost a year later, in December 2020, broadcaster Mission Broadcasting, Inc. did purchase WPIX, and Mission entered into a local marketing agreement with Nexstar (the Nexstar-Mission Agreement). 

Nexstar claims that Mission’s purchase of WPIX — coupled with the Nexstar-Mission Agreement — brought WPIX under the Comcast-Nexstar Agreement’s definition of an “additional station.” But Nextstar argues that Comcast refused to pay under the Comcast-Nexstar Agreement, instead retransmitting WPIX programming without paying Nexstar the contractually required fees.

The complaint alleges that WPIX constitutes an “additional station” under this provision of the Comcast-Nexstar agreement:

Additional Stations. In the event that during the Term hereof, [Nexstar] becomes the licensee, programmer, and/or bona fide manager of … a television station(s) other than a Station and [Nexstar] is not prohibited from negotiating for retransmission consent on behalf of such station under FCC’s Rules (each, an “Additional Station(s)”), such Additional Station(s) shall be added to this Agreement as of the date of consummation of the relationship with such Additional Station(s) and shall be subject to the same terms and conditions as those applicable to the Stations, and any Operator Cable System(s) or MVPD system(s) that retransmits such Additional Station(s)’s Signals(s) shall be added to this Agreement as a System with respect to such Additional Station(s). 

(Italics added.) 

Nextar claims that it has satisfied each of the contractual provisions: Nexstar is a “programmer” for WPIX, given the Nexstar-Mission Agreement, which permitted Nexstar to negotiate for retransmission of WPIX’s content. 

During pre-complaint correspondence, Comcast apparently argued that it was not required to pay Nexstar under the Comcast-Nexstar Agreement because Comcast had already entered into a separate contract with Mission. But in response, Nexstar’s complaint argues that Comcast’s agreement with Mission does not relieve Comcast from its obligations under the separate Comcast-Nexstar agreement. The complaint also contends that Mission itself apparently informed Comcast that the Comcast-Mission agreement did not apply to WPIX. 

In a development that appears to be tangentially related to the contractual issues, Nexstar’s complaint also contends that Comcast filed a post-hoc petition asking the Federal Communications Commissionto reverse the agency’s prior approval of Mission’s local marketing agreement with Nexstar. 

Nexstar’s complaint asks that Comcast pay $3 million for the six-month period ending June 2021, alleging that damages are ongoing.

Comcast is represented by Davis Polk & Wardwell LLP. Nexstar is represented by Covington & Burling LLP.