It came as a rude shock to hundreds of thousands of hometown Buffalo Bills fans as they prepared for their Sunday TV game-watching ritual on Oct. 5.
WIBV-TV, the CBS affiliate station that is home to the Bills, had disappeared from the channel lineup on the Time Warner Cable systems serving Buffalo and surrounding areas. In its place was a Starz kidvid channel and a Chyron slate across the bottom noting that Time Warner Cable was in a contract dispute with WIBV owner Lin TV Corp.
A football fan’s worst nightmare scenario also played out that morning in Green Bay, Wis., where Lin-owned Fox affil WLUK-TV and the Green Bay Packers were MIA.
More than two weeks later, 15 Lin-owned stations in 11 markets remain off the cable grid for Time Warner Cable subscribers. Lin and Time Warner are enmeshed in a familiar fight — a battle over fees for retransmission consent rights.
Lin is said to be seeking 25¢-30¢ per month per Time Warner Cable subscriber in the 11 markets. Time Warner doesn’t want to pay anything, arguing that viewers can tune in those stations for free using analog or digital rabbit ears. (The sides say they have been negotiating nonstop since Lin yanked its stations on Oct. 3.)
Battles over retransmission consent rights have been a constant for local stations and cable operators every few years since the policy was enacted along with a raft of other cable-biz regulations in 1992.
But in the next 12 months, biz veterans say the retrans wrangling will be intense because so many broadcasters are firmly focused on increasing the fees they command from local cablers. A slew of retrans deals for stations in medium- and small-sized markets will expire at year’s end, setting the stage for more standoffs and possible blackouts a la Lin-Time Warner.
Industry vets say a big factor is the influence of all the private equity coin that has flowed into station ownership in the past few years. With local advertising enduring a prolonged slump, some investors are looking to richer retrans pacts as a means of offsetting lower-than-projected revenues and return on investment.
Radio giant Clear Channel Communications sold its 35 TV stations earlier this year for $1.25 billion to a group led by Providence Equity Partners. Mogul Haim Saban and prominent Wall Street fund Texas Pacific Group forked over $12.3 billion for Spanish-language broadcaster Univision last year. Oak Hill Capital Partners acquired eight stations from News Corp. this year for $1.1 billion.
Univision has caught the broadcasting biz’s attention by floating the notion it will seek a $1-per-subscriber fee in its retrans deals, given the overwhelming share of the Spanish media market the network commands.
The tenor of the discussion reflects broadcasters’ long-term frustration at receiving far lower carriage fees than cable outlets even though local stations tend to be among the most watched channels on a cable system.
The Federal Communications Commission rules laid out in 1992 give stations a choice every three years. They can opt for a “must-carry” deal, in which the local cabler doesn’t pay the station but has to carry it in its basic package; or they can negotiate a “retransmission consent” contract on which there is no guarantee the sides will come to terms.
Retrans fights that get ugly a la Lin-Time Warner inevitably play out in a political context, in the sense that all politics is local, and nothing is more local than a Big Four network affiliate in a small- or medium-sized market.
Earlier this month, New York Gov. David Paterson wrote a letter to the CEOs of Lin and Time Warner Cable urging them to call a truce that would allow Time Warner Cable to carry WIVB’s coverage of the Oct. 19 Buffalo Bills game.
“Bills games are not just about football,” Paterson wrote. “They are part of the foundation of this community. Every Sunday, generations of Western New Yorkers — families, friends and neighbors — put everything aside and come together to cheer with one voice for one team.”
The governor’s letter didn’t sway the combatants. But at least one frustrated observer found a silver lining in so many Bills fans having to miss the team’s performance on Oct. 5.
“If we had to kiss a game goodbye, that grape stomp by the Arizona Cardinals was clearly the one,” columnist Jeff Simon wrote in the Buffalo News. “Spending the Sabbath watching every painful detail of a 41-17 waxing (complete with quarterback concussion) was probably a bit more penance than anyone counted on.”