Comcast inks early pact with CBS

Cable operator nabs carriage deal for net's properties

In the acrimonious world of TV carriage pacts, where talks and the volley of threats often lead right up to and past the inevitable midnight deadline, inking a distribution deal 17 months ahead of time is unthinkable.

But that is exactly what Comcast and CBS managed to pull off. The companies said Monday they had reached a precedent-setting, 10-year deal that will provide the nation’s largest cable operator with retransmission consent for the Eye’s stations, and offer carriage to all of CBS’ TV properties, including Showtime and CBS College Sports, across all platforms. The existing deal between Comcast and CBS wasn’t due to expire until the end of 2011.

Comcast’s strategy in recent years has been to try to negotiate longer-term deals, a practice that other cable and satellite operators may try to follow, particularly since new technologies and distribution platforms could place the existing cable TV model in jeopardy.

What has become more common on the carriage front in recent years are battles such as the one earlier this year between Cablevision and ABC, in which subscribers lost their New York ABC station leading up to the Oscarcast. Before the station was put back on the air, customers had missed 15 minutes of the ceremony.

The Comcast-CBS agreement is unique in its scope. Retrans agreements typically extend no more than five years. Executives declined to disclose how much Comcast will pay CBS for carrying its stations and channels. Previously, CBS said it would bring in $100 million in retransmission revenues this year, jumping to $250 million in 2012.

One analyst projected that the CBS net alone would earn 50¢ per subscriber per month from the deal starting in 2012. Figuring that there are 12 million subscribers who receive CBS owned-and-operated local channels in Comcast’s footprint, it means the Eye would receive a payment of more than $72 million in 2012, said Anthony DiClemente, an analyst with Barclays Capital. The per-subscriber fee could rise to more than a dollar by the end of the new contract, DiClemente estimated.

The deal is getting done as Comcast is trying to take control of rival network NBC through a joint venture. The breadth of the deal could suggest that Comcast wants to send the message to regulators that it will negotiate in good faith with potential future competitors.

“In this time of rapidly changing technology and viewership interest,” said Comcast CEO Brian Roberts, “we were able to structure a deal that gives customers the content they want without any threat of disrupting service.”

Added CBS CEO Leslie Moonves: “I look forward to all that we will do together — across multiple platforms — to offer the audience we share the viewing experiences they’ve come to expect from our two companies.”

The deal calls for Comcast to give carriage to CBS’ new cable outlet, the Showtime-owned Smithsonian Channel, and for it to receive for the first time some popular Showtime programming for online, such as “Weeds.”

Making the deal even more significant, if, over the course of the 10 years, new, more attractive distribution models emerge, CBS will still be committed to providing its content to Comcast during that time. Eye will also be able to provide its programming to other online and mobile distributors.

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