UPDATE: DirecTV Files FCC Complaint Against Tribune Co.

DirecTV Group Inc. (DTV) has asked the Federal Communications Commission to intervene in a dispute with Tribune Co. that has blacked out local stations for more than five million subscribers in key markets like New York, Chicago and Los Angeles.

In a complaint filed to the federal regulator Monday, DirecTV sought an expedited ruling against Tribune, accusing the broadcaster of failing to negotiate in good faith. DirecTV says the two companies had agreed in principle Thursday over the fees Tribune charges DirecTV to air its channels, but the agreement was overruled Friday by the bankrupt Tribune's creditors.

Tribune Co.'s 23 local channels have been blacked out for DirecTV subscribers since midnight Saturday.

"DirecTV negotiated with Tribune for months, only learning on the very eve of expiration that it had never been dealing with anyone who had the authority required under the [FCC] rules," the company said in the complaint.

A Tribune spokesman wasn't immediately available for comment.

The latest dispute comes as Tribune seeks to emerge from bankruptcy proceedings, after an $8 billion leveraged buyout forced the broadcast and publishing company into Chapter 11 protection in 2008.

DirecTV also questioned whether Tribune prematurely transferred its broadcast licenses to bankruptcy creditors, which include JP Morgan Chase & Co. (JPM) and the hedge funds Oaktree Capital and Angelo Gordon.

Fee disputes are commonplace in the television industry, where entertainment companies, pay-TV distributors and broadcasters face fierce competition to maintain their profit margins.

Earlier this year, Time Warner Cable Inc. (TWC) and Madison Square Garden Co. (MSG) resolved a seven-week standoff over programming fees that deprived Time Warner Cable subscribers in New York of New York Knicks and Rangers games. A resolution between the two companies was brokered by the New York state attorney general's office.

DirecTV on Saturday touted an agreement in principle reached over the phone with the company, but Tribune Broadcasting later released a statement denying any deal.

On Monday, DirecTV said Tribune executives had represented themselves as having the authority to negotiate a retransmission agreement but the troubled media company's creditors overruled them.

DirecTV shares were down a penny at $49.93 in after-hours trading.

-By William Launder and Drew FitzGerald, Dow Jones Newswires; 212-416-3412; william.launder@dowjones.com

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