In January, DirecTV had to decide whether to pay Newsmax, a tiny right-wing station it had distributed for free for seven years, or remove it and face its anger. Newsmax portrayed DirecTV’s choice as political suppression. Trump and Taylor Greene want Newsmax back.
Carriage charge disputes are prevalent. I’ve covered cable TV for 20 years, but I’ve never seen anything like this. To appraise television, politics, and culture, I examined both sides of the dispute. Bottom line: DirecTV’s choice makes commercial sense, but Newsmax’s emotional appeal may compel a settlement.
Here’s the math. Cable, satellite, and streaming TV systems like YouTube TV sell bundles of channels, a strategy that was hugely profitable for channel owners for decades but is now under pressure from streaming powerhouses and other market forces. The bundle’s price includes channel costs: Fox News earns many bucks each subscription every month. Lower-rated channels pay platforms for placement or accept cents.
The larger your audience, the more you can charge; the smaller, the less likely you are to charge. Newsmax’s readership is small: Nielsen estimates 100,000 people watch at once. Fox News, VH1, Lifetime Movie Network, and Sundance TV are among over 50 cable networks that outrank Newsmax.
Newsmax’s request came at a bad moment for DirecTV. Since cord-cutting increases year after year, the bundle is at jeopardy due to rising monthly rates. When I was an anchor at CNN, a major part of my compensation came from CNN’s owner’s monthly carriage fees, yet when I paid my Comcast bill, I cringed and pondered whether I should quit television.
Apparently DirecTV is striving hard to save expenses. In January, the corporation cited cord-cutting and carriage fees for layoffs, stating “the whole pay-TV business is hit by the secular decline” in audiences and the rising cost of content, so “we’re altering our operational expenses to coincide with these changes.”
DirecTV alters their TV selection frequently. Channels change. Newsmax did not leave quietly since this is a brand-defining event.
Newsmax’s boisterous CEO, Giancarlo Ruddy, seized on the Trump base’s resentment at Fox’s accurate election coverage in 2020. Fox stated Trump lost, and some Fox followers switched to Newsmax, which refused to proclaim Joe Biden the president-elect. The weeks between the election and the revolt were dominated by Newsmax’s ratings increase. Ruddy added TV veterans like Greta Van Susteren to Newsmax’s programming and operations after the ratings dropped. He is now asking a carriage charge for a channel he used to give out for free, even though the climate is harsh and the viewership is small.
Ruddy thinks he deserves it. He paid distributors to carry Newsmax TV when it was smaller. He later streamed it free to grow a following and sell advertisements. Newsmax is now a 24/7 Fox backup with Sean Spicer and Greg Kelly, giving Ruddy power. The station “requested for a cost of around $1 per year per subscriber,” far less than CNN, which “gets $14 per subscriber through DirecTV.” (Newsmax and Ruddy did not reply to requests for comment; this piece quotes recent public remarks and interviews with other publications.)
Newsmax’s suggestion, if accurate, was modest. It’s $13 million a year for DirecTV, which is haemorrhaging money. The majority-owned AT&T network doesn’t disclose its financials. In 2022, Leichtman Research Group expects DirecTV lost 1.5 million customers. DirecTV declined three times. On Jan. 25, DirecTV terminated the broadcast when Newsmax demanded a fee. Ruddy quickly termed it “blatant political discrimination and censorship against Newsmax.”
DirectTV denies that Newsmax’s conservatism is involved. “DirecTV remains interested in delivering Newsmax—and wishes it had never left—as long as it doesn’t place an excessive financial strain on our vast customer base,” a spokeswoman said. Dollars-and-cents appeal doesn’t work in a heated political context.
Cancelled?
Republicans have long been motivated by internet and media company censorship allegations. Saying you’re cancelled is the fastest way to get right-wing compassion. Newsmax was deleted, however DirecTV likes “gone.”
Ruddy activated Republican allies before cancellation day. They crafted a cancel-culture screenplay Newsmax hosts and fans repeated on TV and social media. On Jan. 13, Ruddy wrote House GOP members a memo regarding the issue. On Jan. 20, 42 Republican members of Congress, many of whom are Newsmax guests, signed a letter. The letter said DirecTV was “trying to de-platform Newsmax” and “actively seeking to suppress conservative ideas on its system.” The final letter was a warning concerning Congress’s censorship investigations. “Will not be confined to social media companies,” the letter stated.
Republican-favored Breitbart gave another hint. The Jan. 21 story “Woke Wall Street Company TPG Capital Contributes to DirecTV Censoring Conservatives” The cancel-culture script included this notion. When AT&T broke out DirecTV in 2021, TPG, an ESG and “impact” investor, bought 30%. The Breitbart piece suggested that private equity would suffer if Newsmax lost its channel position.
Newsmax lost, and Ruddy used his media channels to convince DirecTV to change direction. I’ve seen this before, but never under a news header. Newsmax seems to be the main story: In six weeks, this website has produced over 270 disagreement pieces. TVEyes found 1,600 mentions of DirecTV and 1,200 of “censorship” since the channel abandoned it.
In February 2021, two House Democrats wrote to a large number of media CEOs, accusing DirecTV of anti-Newsmax bias. The Democrats’ letter cited the January 6 attack and called out Fox, Newsmax, and One America News. Channels resisted and accused legislators of viewpoint discrimination. In April 2022, DirecTV cancelled One America, sparking a new conspiracy theory about leftist politicians and big business. After a “regular internal assessment,” DirecTV pulled OAN, which seems unlikely given that two Democrats despise it. When DirecTV refused to pay Newsmax, Ruddy framed it as a pattern of political foul play to an audience that was predisposed to agree, and it became part of the anti-DirecTV narrative.
Business-only.
Media executives mock political allegations. Tom Rogers, who founded CNBC and MSNBC, told me this is “business all the way”. Rogers has negotiated with DirecTV and thinks this matter would have been simple if not politicised and weaponized. He called Fox News “must-carry” due of its popularity. Distributors don’t dare remove Fox’s $3 or more per month per subscription. Newsmax is powerless.
DirecTV’s disagreement isn’t alone. Newsmax wants payments from Comcast and Charter, among others. Not securing DirecTV might cause ripples. “Its constituency is red-state rural, and what’s left of a swiftly shrinking DirecTV footprint is red-state rural,” Rogers added. Newsmax’s fight is existential, unlike DirecTV’s.
Different replies have shown that. Newsmax has dominated right-wing media since termination day. House Republicans and Newsmax hosts have flooded Twitter and Facebook with DirecTV criticism. The rhetoric is heating up: January’s House Republican letter criticised DirecTV for having “11 leftist news and information channels,” but Ruddy now mentions “22 liberal news channels.” The wider list includes Comedy Central and the Weather Channel.
DirecTV has responded calmly to the other side’s hyperbolic claims of discrimination and dictatorship. The distributor says Newsmax “abuses” its journalistic platforms to further its economic interests. A DirecTV official said Newsmax “offers broadcast time to individuals who sign letters” against the distributor.
Newsmax’s top talent has extensively promoted the brand on social media using TikTok-style videos. It hasn’t promoted its news coverage. CNN and Fox have more journalists than Newsmax. Fox broadcast the missile attack on a suspected Chinese spy balloon on a Saturday afternoon in February. Newsmax repeated their weekly conversation show. Which channel had 10x more viewers?
That’s the true story, not censorship. Newsmax lacks the viewership to force DirecTV and other distributors to pay. According to Nielsen, Newsmax’s most popular broadcasts seldom exceed 200,000 views, despite hundreds of Republican senators’ claims. Fox is considerably more popular, making it uncancelable.
In private discussions with senators like Ted Cruz, DirecTV CEO Bill Morrow has made these comments. Cruz still claims “corporate political prejudice.” The fact that so many Republican elected leaders have worked so hard for a low-rated cable channel reveals the party’s priorities. Almost a dozen politicians have proposed hearings. “I believe that is a location that we should look at,” House Speaker Kevin McCarthy stated in early February. His caucus believes hearings are insufficient: “We must really do something,” Texas Rep. Keith Self remarked a week later. “I don’t want hearings. Lawmakers must address this double standard.” Predictably, Self said it on Newsmax.
Several conservatives oppose the pressure effort. The Wall Street Journal editorial board has called Republicans coercive. Republican Rep. James Comer, chair of the House Oversight Committee, said he has been in “constant communication with the leadership at AT&T and DirecTV” about the dispute and urged them to “get this worked out or else,” prompting Democratic Rep. Jamie Raskin to accuse Comer of intimidating a private corporation.
Rogers claimed DirecTV “clearly established this was not ideological by bringing on another conservative speaker straight away.” The First TV, a streaming venture with Dana Loesch, Bill O’Reilly, and other right-wing talkers, was thrilled to be broadcast for free. Newsmax said, “you can’t replace a Cadillac with a Honda.” Both can get you from A to B, and The First’s DirecTV audience has increased. It may win the Newsmax-DirecTV fight alone.
Behind the drama, negotiations
The political upheaval has obscured ongoing discussions. “This continuing business issue boils down to economics on both sides, not politics or ideology,” a DirecTV spokeswoman said.
Newsmax first advised viewers and readers to clog DirecTV’s phone lines and cancel their subscriptions. (A DirecTV insider claims the cancellations are typical of a transitory programming disagreement.) The channel’s messaging has changed from “cancel” to “complain,” suggesting a more rational approach and maybe a settlement. “We’re confident that we can get to some agreement,” Ruddy stated at the Conservative Political Action Conference on March 2. Ruddy claimed DirecTV softened their attitude “around two weeks ago,” implying that GOP political pressure drove DirecTV back to the table. “That’s disingenuous,” a DirecTV official said. “We’ve been negotiating for months and have always intended to supply the network on the correct financial terms.”
Even if they settle, the dispute has hardened conservative views on corporate opponents. At a recent gathering with supporters, Trump blamed “radical left individuals” for DirecTV removing One America News and Newsmax. “They both received extremely excellent ratings,” he remarked.
Trump was wrong, but the crowd’s shouts proved his emotional case. Conservative activists feel attacked. They feel cancelled. Newsmax uses that feeling to get millions in carriage fees. Political polarisation may disrupt even the most unlikely corporate sectors, regardless of the channel’s performance.
The Walter Shorenstein Media and Democracy Fellow at Harvard Kennedy School is Brian Stelter. Former CNN “Reliable Sources” anchor.
