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Blackout! Sinclair TV stations go dark on Dish

Sinclair Broadcast Group TV stations in 36 states went dark on Dish late Tuesday night after the two parties failed to agree to terms over a new retransmission consent agreement.

The blackout of 129 stations in 79 markets affects more than 5 million Dish customers.

For the past nine days, the two parties were trying to come to a deal after agreeing to an extension of a contract that expired August 15. Nearly two dozen TV stations that Sinclair doesn’t own, but manages through local market agreements, remain on Dish.

At the start of negotiations, Dish filed a complaint with the Federal Communications Commission, accusing the broadcaster of negotiating in bad faith, a complaint Dish said it “renewed” with the blackout.

“We are calling on the FCC to intervene in Sinclair’s senseless blackout that needlessly punishes consumers despite an agreement on rates and all other terms for Sinclair’s local stations,” said Jeff Blum, Dish senior vice president and deputy general counsel. “Sinclair rejected every opportunity to serve viewers including our extension offer, which featured a full true-up, and has instead chosen to use innocent consumers as pawns to gain leverage for a cable channel it hopes to acquire but does not own today.”

The timing of the blackout comes as the FCC is taking up a rule making to review what constitutes “good faith” negotiations, setting off a raucous debate between broadcasters and pay TV providers. Retransmission reform advocates were quick to call the blackout “the largest blackout in American history.”

According to Dish, the two had reached an agreement on carriage rates, but Sinclair wanted to negotiate a distribution deal for an “unrelated cable channel” that it doesn’t own. Instead of accepting a short-term contract extension with a “true-up” of the new rates, Sinclair walked away and pulled the plug.

“Sinclair had nothing to lose and consumers had everything to gain from an extension of our existing contract that would allow negotiations to continue,” said Stanton Dodge, DISH executive vice president and general counsel. “Instead, Sinclair rejected our offer and has chosen to use innocent consumers as pawns to gain leverage for the economic benefit of Sinclair, while causing substantial harm and disruption to the lives of those very same consumers who ultimately will bear the brunt of the unreasonable terms sought by Sinclair.”

Sinclair said in June that it had a deal with Metro-Goldwyn-Mayer to develop a new sci-fi network that would launch in fourth quarter. The company also recently launched a college sports network that is distributed across its station portfolio and struck a deal with former Disney CEO Michael Eisner’s company, The Tornante Co., to develop syndicated programs.

Sinclair was not immediately available for comment.