NEW YORK — Time Warner’s TBS is continuing to sign up cable operators to pay the network a license fee for the first time in TBS’ two decades of operation, with Adelphia Communications the latest convert.
Adelphia and TBS declined to comment on dollar figures. But sources say Adelphia, a top-10 multisystem cable operator serving close to 2 million subscribers, will end up paying TBS $6 million or so in the first year of a five-year contract. The total will go up each year by about $480,000, topping off at $8 million or so in the final year.
In exchange for these fees, operators will get two minutes of commercial time within each TBS hour to sell locally. Depending on the economic health of the local market, the revenues from these spots could go a long way toward covering the license fees. But TBS is giving no guarantees to cable systems on local ad revenues, sources say.
Earlier this week, TBS signed the 13th- and 14th-largest MSOs, Falcon Cable TV and Prime Cable. Also on board are Time Warner Cable, John Malone’s Tele-Communications Inc., Cox, Jones Intercable and the NCTC (National Cable TV Cooperative). These deals will end up funneling license fees to TBS from a total of about 43 million subscribers.
Clock winds down
Before the month is out — Jan. 1, 1998, is the date when TBS officially transforms itself from a superstation to a basic-cable network — TBS will still have to get contracts from five top-10 cable operators: Media One, Comcast, Cablevision Systems, Century Communications and Marcus Cable.