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The
court filing, made as part of a lawsuit OAN filed against AT&T
and DirecTV last week, reveals an exclusive contract for an AT&T
subsidiary to sell commercials for OAN.
AT&T owns 70% of DirecTV, which announced in January it would
drop OAN, a network known for promoting false 2020 election
reports. The move came three months after Reuters revealed that
AT&T played a pivotal role in creating OAN and has paid tens of
millions of dollars to carry the network on DirecTV.
To read the Reuters Special Report, click
https://www.reuters.com/investigates/
special-report/usa-oneamerica-att
OAN’s lawsuit, which seeks $1 billion in damages, alleges that
the removal of the network from the satellite service was
politically inspired and “could be devastating” financially.
Court records show that about 90% of OAN’s revenue is generated
from its AT&T/DirecTV deals.
Robert Herring Sr, founder and CEO of San Diego-based Herring
Networks, which owns OAN, did not respond to requests for
comment. The lawsuit was filed March 7 by Herring Networks on
behalf of OAN in state court in San Diego.
DirecTV and AT&T did not respond to specific queries from
Reuters about the advertising pact, but issued statements about
OAN’s lawsuit.
“These allegations are completely without merit,” AT&T said. The
telecommunications giant denied OAN’s claim that the political
beliefs of executives influenced the decision to drop the
network. DirecTV called the lawsuit “baseless” and said it was
“confident that we have fully complied both with the law and our
agreement.”
After the Reuters report ran last year, AT&T issued a statement
that said it “has never had a financial interest in OAN’s
success.”
But the new lawsuit alleges that in addition to helping to
create and distribute OAN, AT&T entered into the advertising
deal with the network in 2019.
Under that deal, an AT&T subsidiary called Xandr is OAN’s sole
advertising vendor and earns a commission on commercials aired
by the network, the lawsuit alleges. A pending sale of Xandr to
Microsoft will not include the portion of the company that sells
commercials for DirecTV or OAN.
After DirecTV drops OAN, said a person familiar with the
contract, the AT&T subsidiary will continue to serve as the
advertising representative for OAN on other platforms, such as
regional cable companies and cable and internet provider Verizon
FIOS.
The pact to sell commercials is separate from the deal to air
OAN on DirecTV, and does not expire until 2024.
In the lawsuit, Herring alleged that AT&T’s decision to drop OAN
from DirecTV is “part and parcel of a larger, coordinated,
extremely well-financed political scheme to take down Herring
and unlawfully destroy its ability to operate in the media
business.”
The business relationship between OAN and AT&T has become fodder
for political activists on all sides.
Following the Reuters report about AT&T’s role in OAN’s
creation, the NAACP and left-wing groups called for DirecTV to
stop airing OAN. After DirecTV announced in January it would
drop OAN, former President Donald Trump honored Herring at a
rally and asked supporters who use DirecTV to cancel their
subscriptions.
“It is a very popular channel, far more popular than most would
understand, and they are being treated horribly by the Radical
Left lunatics,” Trump said in a February statement.
In the lawsuit, Herring said OAN ranks in the top 10% of DirecTV
programming, ahead of CNBC, Newsmax and CNN Headline News.
Reuters could not independently verify this claim, and TV
ratings services do not release OAN figures.
Herring, who amassed a fortune as a tech entrepreneur, launched
OAN in 2013. His family-owned Herring Networks also owns a
lifestyle and entertainment channel called AWE.
In the lawsuit, Herring said AT&T has earned “generous
commissions via selling advertising on AWE and OAN.” The
advertising deal called for AT&T to sell both traditional
commercials, which every viewer sees, and targeted ads, which
are tailored “to the individual viewer based on data known about
the viewer.” The court filings don’t say how much revenue AT&T
has garnered from the ad deal.
OAN alleged that after AT&T signed the advertising contract in
2019, the network “reasonably expected” this was “proof of a
commitment” for a long term DirecTV deal, at least until 2024,
when the ad contract expires. DirecTV’s decision to drop OAN,
the lawsuit said, “stunned” Herring and damaged its reputation.
“AT&T and DirecTV signaled to the public that something was
wrong, hurting OAN’s business and standing in the news media
business,” the lawsuit said.
This is not the first time Herring has sued AT&T. In 2016, a
Herring lawsuit alleged that AT&T reneged on an oral agreement
to air OAN on DirecTV, a contention AT&T denied. About a month
after that lawsuit was settled in 2017, OAN began airing on
DirecTV.
(Reporting by John Shiffman. Editing by Ronnie Greene)
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