AT&T, One America News to keep ad deal even after DirecTV drops network

By John Shiffman

WASHINGTON, March 14 (Reuters) - AT&T’s financial relationship with One America News is deeper than previously known and will continue even after DirecTV drops the far-right network from its satellite service next month, a new court filing shows.

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 Link

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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