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Cable operators buy CBS signal

Nine small cablers ink retransmission deals

CBS has inked retransmission consent deals with nine small cable operators — a first step toward what it hopes will become a lucrative source of cable coin.

The operators, which represent 1 million cable subscribers, agreed to a deal that includes analog, digital, multicast and high-def programming rights to CBS-owned stations. Terms were not disclosed.

CBS had been seeking payments to carry its signal, rather than invoking the “must-carry” provision of federal communications law, which requires that cable ops carry a local broadcast affiliate without paying a fee.

“This is a trend that bodes well for us going forward as future retransmission deals are negotiated,” CBS topper Leslie Moonves said in a statement.

The Eye’s retransmission deals with major cable operators such as Comcast and Time Warner don’t start expiring until 2009, but the company is attempting to lay the groundwork for tough negotiations ahead.

CBS is helped by the entry of telcos into TV distribution. Company inked a $10 million retrans deal with Verizon last year.

But if Sinclair Broadcasting’s contentious battle with cable ops are any indication of things to come, it won’t be easy. Sinclair is seeking 40¢-50¢ per subscriber from cable operators for the right to carry the signal of its local stations.

CBS is seeking fees in the same range. Unlike cable networks, for which cable and satellite operators are accustomed to paying, local stations have not traditionally been paid for their signal.

CBS has a lot of leverage over small cable operators but less over large ones. Since the Eye has few cable assets to throw into a deal, its efforts will be a test of the power of a stand-alone network against the companies that control distribution.

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