Cabler cries foul on 'illegal tying'; b'caster sez it offered extension
Cablevision accused Tribune of unlawfully seeking to tie a carriage agreement for its Fox affiliate WTIC in Hartford, Conn. to deals for WPIX and other Tribune stations in Cablevision markets: CW affil WCCT Hartford, CW affil KWGN Denver (carried in some of Cablevision’s Optimum West markets) and MyNetwork affil WPHL Philadelphia, carried in a small portion of Cablevision’s New Jersey service area.
WTIC is the lone Tribune broadcast station that remained on Cablevision’s air after the other stations went dark shortly after midnight Friday. It’s understood that Cablevision believes it has a short-term extension agreement for that station and for Tribune’s cable channel WGN America. Fox affiliates are more valuable to multichannel video providers like Cablevision that CW or MyNetwork outlets because of the network’s primetime programming and because Fox carries NFL games.
“A major barrier to an agreement is Cablevision’s strongly-held view that Tribune is attempting to illegally tie the carriage of its Fox affiliate in Hartford to WPIX and other less popular Tribune-owned channels,” Cablevision said in a statement. “We are pursuing both legal and regulatory options to stop Tribune’s illegal tying and will continue to hold the line on increasing programming costs.”
Tribune responded by noting that group-wide pacts are commonplace in retransmission consent deals between broadcast station owners and MVPDs. It’s rare, if not unheard of, for owners of multiple broadcast stations to allow an MVPD to cherry-pick which stations they want to carry. There seemed to be some dispute between the sides as to whether there was a pre-existing extension deal that applied to WTIC and WGN America.
“All of our retransmission agreements in the past with Cablevision, and the negotiations leading up to them, dating back two decades, have been for all Tribune stations in markets served by all Cablevision systems,” Tribune said. “Our negotiations and agreements with all other major cable providers and satellite carriers have been the same. This approach is more efficient, benefits subscribers, is completely lawful, and fully complies with the FCC’s good faith negotiation rules.”
The public sparring between the sides heated up even as discussions continued Friday in the hopes of reaching a deal. Cablevision’s blackout of the stations caught Tribune by surprise, as negotiations had been ongoing. Tribune maintained that Cablevision gave them no warning of the blackout until after the stations were dark. As the Aug. 17 deadline approached, Tribune had offered a one-week extension under the terms of the previous agreement to avoid a service disruption.
“Tribune was willing to provide Cablevision subscribers access to the valuable programming on these stations while working toward a new agreement,” Tribune said in a statement. “Tribune never made any threat to withdraw these stations or any demand that Cablevision remove them.”
Tribune asserts that its last offer to Cablevision amounts to “less than a penny a day per subscriber,” which is less than the cable operator pays for many channels with lower ratings. The current negotiations mark the first time that Cablevision has bargained with Tribune for cash compensation for its local stations.
The market environment for retrans deals has changed dramatically in the past three years, as broadcasters in need of new revenue streams began demanding cash fees similar to the carriage coin that multichannel video providers pay to other channels. Cablevision has about 3.3 million subscribers.
Immediately after pulling the signals, Cablevision issued a pointed statement accusing Tribune of demanding high fees for its stations because its parent company is still working its way out of bankruptcy.
“The bankrupt Tribune Company and the hedge funds and banks that own it, including Oaktree Capital Management, Angelo Gordon & Co. and others are trying to solve Tribune’s financial problems on the backs of Cablevision customers,” Cablevision said. “Tribune and their hedge fund owners are demanding tens of millions in new fees for WPIX and other stations they own. They should stop their anti-consumer demands and work productively to reach an agreement.”
Cablevision may hear from New York Mets fans as a result of the WPIX blackout. The station is the local broadcast TV home of the team (the team is also carried on the regional Sports Network New York cabler) , and is skedded to telecast two away games on Saturday and Sunday.
The Cablevision-Tribune blackout came just 24 hours after satcaster Dish Network and Sinclair Broadcast Group came to terms, after much saber-rattling, on a deal that went down to the wire and threatened to blackout 70 Sinclair stations in 45 markets, including St. Louis, Pittsburgh and Baltimore.
Tribune’s station group experienced four-day blackout on a broader scale from March 31-April 4 amid a retrans deal fight with satcaster DirecTV, which carries all of Tribune’s 23 local stations.