CBS Chief Moonves: Time Warner Cable Can Afford to Pay Us More

Les Moonves CBS Upfront
Brian To/FilmMagic

In response to CEO memo, cable operator says The Eye’s current asking price does not represent a ‘good value’

CBS fanned the flames of its contract dispute with Time Warner Cable by releasing a memo penned by topper Les Moonves in which he claimed the cable operator’s payments to The Eye are “out of whack” — while TWC responded by reiterating that the CBS hikes are unreasonably steep.

The escalating war of words indicates the two sides aren’t closer to reaching a deal, which could result in 13 CBS-owned stations in L.A., New York, Dallas and five other markets going dark for some 3 million Time Warner Cable subscribers on Thursday, July 25, at 9 a.m. Eastern. The companies said they extended the previous deadline from Wednesday at 5 p.m. Eastern.

“It’s not like Time Warner Cable doesn’t have the money,” Moonves said in the memo, distributed to media reporters Tuesday morning. “Cable is a very, very profitable business, and Time Warner Cable can certainly afford to pay CBS a fair rate for our programming without passing any added cost on to its customers.”

SEE ALSO: CBS Ready to Pull TV Signals in War With Time Warner Cable: Analyst

Currently Time Warner Cable pays between 75 cents and $1 per sub monthly for CBS-owned stations, and The Eye is now likely seeking around $2 per subscriber in retransmission-consent fees, according to RBC Capital Markets.

According to Moonves, “there is a very real threat that Time Warner Cable is going to drop our stations in New York, Los Angeles and Dallas (and possibly Showtime) off the air Thursday morning.”

In response, TWC spokeswoman Maureen Huff said that the cable company is willing to pay for CBS’s programming, “and we have offered them significant fees. But their current demands don’t represent a good value for our customers.”

If CBS and TWC fail to reach a deal by Thursday, CBS-owned cable nets including Showtime and Smithsonian Channel also may get pulled. However, a source close to the talks said a carriage deal for the cable channels could be reached separately from the broadcast stations.

SEE ALSO: CBS Uses Radio Heft in Time Warner Cable Battle

The companies’ prior agreement from 2008 expired June 30. They then extended it through July 24 and have now moved the deadline to Thursday morning while talks continue. Many analysts give CBS the edge in leverage in the talks, noting The Eye’s popular lineup of shows and the upcoming NFL season; meanwhile TWC represents no more than 3% of CBS’s total aud while the affected stations cover 25% of TWC’s subscriber base.

Time Warner Cable alleges that CBS is asking for more than 600% what the cable operator pays in retrans fees to independent CBS affiliates in other parts of the U.S.

Moonves, in the memo, said Time Warner Cable charges subscribers more than $20 per month for broadcast programming but that CBS receives “a tiny fraction of that, as do other broadcasters.”

He also repeated the argument that CBS, which has consistently top-rated programming, receives far less than cable channels with lower viewership. “In fact, CBS is not even in the top 10 recipients of the programming fees paid out by Time Warner Cable,” Moonves said in the memo.

CBS in the last five years has reached deals with all other major pay TV operators, including Comcast, Cablevision, DirecTV, Dish, Verizon FIOS and AT&T U-Verse, according to Moonves. The Eye says it has never gone dark in a retrans dispute over that time.

Time Warner Cable’s Huff said CBS has “refused to offer us assurances that the rate they are seeking for CBS is the same rate they are seeking from others.”

Moonves also claimed CBS has offered Time Warner Cable a short-term extension as the parties continue to negotiate, “but to date they have refused.”

Time Warner Cable denied that is has refused to offer an extension to CBS. “We said we’d be happy to consider an extension offer, but right now we want to continue to negotiate to try to reach an agreement before the expiration,” Huff said.

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  1. Theresa says:

    The longer CBS is off here in Dallas just means we will get used to not having that channel and those shows no matter how much we may enjoy them. I only watch 2 shows on CBS and have not missed them yet of course the new season has not started. Eventually it will not bother anyone. It may mean the end of CBS or TWC.

  2. Todd Jones says:

    Hey Les. Did you know your content is FREE over the air. I don’t think they should have to pay any fees for something that is given away free. If Time Warner Caves, then every broadcast channel will raise their rates. Our cable bills are already way too high. I plan on getting an HD antenna just to get CBS….wait for it…for FREE!.

  3. martin jones says:

    Can I pay for my cable with food stamps ?

  4. Jen says:

    I’m with CBS on this one. They want a raise, and TW can afford to give them a raise without charging the customers extra. Make it happen TW.

  5. Ralph says:

    I still do not understand if I have to pay for service why do I have to watch commercials. If I have to pay for the retransmission the commercials should be removed. This should go for all the channels on cable Fios what ever. If I have to pay no commercials. The stations are getting paid twice. I am old enough to remember when these services were first being offered that was a selling point get cable so you would not have to watch them what a laugh. the saddest part is customers put up with it.

  6. jamesjimcie says:

    Every Time Warner Cable customer should be ashamed of CBS and all of their head executives for this blackout that result in the viewers from being able to watch their favorite shows with Time Warner Cable.

    This is an excuse for CBS and all of their head executives wanting to try to be way too big being the Wal-Mart’s, the Marlboro’s, the Joe Camel’s, the Paramount Pictures with the movie theater chain of the 1940’s, the Morris Levy’s when he was part of Roulette Records, the Clive Davis’s when he was at Columbia Records in the 1970′s, the Neil Bogart’s of Casablanca Records fame of the 1970′s disco era, the Trinity Broadcasting Network’s, the David Smith (one of the Smith brothers from Sinclair Broadcast Group), the Perry Sock and the Nexstar Broadcasting Group, the Harry Pappas as part of the Pappas Telecasting Companies, the Bernard Madoff’s, the Enron’s, the Worldcom’s, the Adelphia’s, the Tyco’s, the Martha Stewart’s, the Jill Kelley’s, the Orie sister’s, and the Jesse Jackson Jr’s, of the 2000′s by letting broadcast greed get out of control so all of the head employees and bosses at CBS to be able to enjoy carefree lavishly spending to support carefree lavishly lifestyles with luxurious homes, luxurious jets, luxurious cars, luxurious furs, luxurious jewelry, join luxurious clubs, go to luxurious hotels, go to luxurious casinos to do gambling, go to horse races, throw luxurious parties, and have other luxurious items just to make them very happy then trying and willingness to improve the quality of all the stations they owned and control and making the viewers happy as well. I hope and I wish that CBS and all of their head executives get scolded by both by the ACA and the FCC for making the viewers being forced to deal with this blackout because they could not make a deal to get the stations back to it’s customers sooner and with a fair deal with Time Warner Cable. I hope and I wish that CBS and all of their head executives is barred from buying and owning anymore TV stations in the future after their final decision to remove the stations from Time Warner Cable. I feel that CBS and all of their head executives are trying to bribe like the General Tire/RKO General of the 1960′s and 1970′s by not being very honest of not only the viewers by making them miss the shows on Time Warner Cable and also on themselves with the force of demanding Time Warner Cable to pay up in the retransmission consent to continue to carry the stations.

    I hope and I wish that the FCC would force CBS and all of their head executives to allow Time Warner Cable to carry it’s stations without any interference, in the event CBS and all of their head executives fails to allow Time Warner Cable to carry it’s stations again, then the FCC would force CBS and all of their head executives to allow Time Warner Cable to import out of market stations that are very real close to the station being blacked out being affiliated with the same network, in the event CBS and all of their head executives fails to allow Time Warner Cable to import out of market stations that are very real close to the station being blacked out being affiliated with the same network, then the FCC would allow Time Warner Cable to carry the out of market station with the same affiliation without any restrictions and also be allowed to continue to carry the out of market station that it’s digital television signal is reachable by a outdoor antenna including both it’s SD and HD feeds on the Time Warner Cable service system even after the dispute is over without any interference for 12 whole years to meet FCC rules and regulators.

    This is an excuse for CBS and all of their head executives wanting to be too big being way too busy trying to act like the Baauer’s, the PSY’s, the Carly Rae Jepsen’s, the Tay Allyn’s, the Nicole Westbrook’s, the Rebecca Black’s, the Double Take’s, and the Guns N Roses Axl Rose as well as trying to be the Conrad Murray’s, the Jerry Sandusky’s as the assaulters, the Jodi Arias’s, the Casey Anthony’s, the Charles Starkweather’s, the Charles Manson’s, the Lyle and Erik Menendez’s, the O. J. Simpson’s, the Scott Peterson’s, and the Drew Peterson’s as the greedy murderers, the Alfonzo Dennard’s, the Jeremy Dobbe’s, the Jeffrey Ireland’s, the Amanda Bynes’s and the Lindsay Lohan’s as the drunk and the drug abusers, the Rodney Dangerfield’s, the John Belushi’s, and the Chris Farley’s as the comedians, (all real life people) the Gordon Gekko’s, the Victoria Grayson’s, the Victor Newman’s/the Jack Abbott’s, the J. R. Ewing’s/the Cliff Barnes’s, the Charles Montgomery Burn’s/ the Mayor Quimby’s, the Homer and Bart Simpson’s, the Peter Griffin’s, the Mickey Mouse’s/the Minnie Mouse’s, the Bugs Bunny’s/the Daffy Duck’s/the Porky Pig’s, the Garfield cat’s, the Cookie Monster’s, the Miss Piggy’s, and the Pillsbury Doughboy’s, (all fictional characters) of the broadcasting industry of not coming to reach a deal with Time Warner Cable to carry it’s stations to the viewers with Time Warner Cable everyday.

    This is an excuse for CBS and all of their head executives trying to turn into the 1919 Chicago White Sox’s baseball team and the Southern Methodist University football team of the 1980′s to force Time Warner Cable to accept a take it or leave it deal to carry it’s stations. I urge all of the viewers with Time Warner Cable to boycott CBS and all of their head executives right now for making the Time Warner Cable viewers suffer from being able to watch their favorite shows in a big huge ugly game of baw baw baw baw baw baw baw baw baw baw baw chicken.

    The affected TV viewers with CBS in the areas where CBS owns the local CBS, CW or independent station could try the DTV Green dish antenna system to pick up the affected stations that are owned and maintained by CBS:

    http://www.dtvgreendish.com/

  7. Robin says:

    Could you please report on increased fee structure cbs has already forced shows like soap operas to pay them higher fees. CBS appears greedy & unreasonable to me raising query to community contributions? Time Warner is tremendously generous, kind, accommodating and Gives Back, Supports Non Profits, EDUCATION! Like “Collect A Million Minds” Not Dollars Mr Moonves!

  8. Joe Smart says:

    Because TW cable can afford to pay more doesn’t mean they should. The government can end this constant stupidity by passing a law preventing the over the air networks from charging for re-transmission of their programming. The networks were given a gift by being allowed to broadcast on airwaves owned by the public. People who have cable and satellite should still be able to get those programs for free–which is not the case because of re-transmission fees. The major networks never should have been allowed to do this in the first place. Every year they get more greedy and threaten to pull their programs from one cable service or another if they can’t get more money. There is simply no justification for charging cable subscribers for free over the air programming.

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