×

CBS Blackout Could Be Costing It $400,000 per Day: Analysts

CBS may be losing about $400,000 daily because of the blackout in major Time Warner Cable markets, now entering its fourth day — although the total financial blow to the Eye from the spat likely will be minimal, according to Wall Street firm UBS.

The estimate includes lost retrans revenue and a loss of advertising dollars at both the network and CBS local stations, according to UBS. Every two weeks of being dark on TW Cable equals a loss of 1 cent per share, the firm calculated.

SEE ALSO: CBS Stations, Showtime Go Dark for Time Warner Cable Customers

On Friday at 5 p.m. Eastern, Time Warner Cable pulled CBS signals for approximately 3 million subscribers, primarily in New York, L.A. and Dallas. The operator also dropped Showtime and three other CBS-owned cablers, while the Eye retaliated by blocking Time Warner Cable broadband subs from accessing full episodes online.

If history is a guide, the standoff should be resolved in less than two weeks, UBS said, although other observers have suggested CBS and Time Warner Cable may not come to terms until September.

“Our view continues to be that consumers have more loyalty to the content rather than the company which is responsible for distribution, and with contracts often running 5+ years, CBS can’t afford to take below-market value given the inability to renegotiate terms,” UBS analysts John Janedis, Jaime Morris and Michael Russo wrote in the Aug. 4 note.

CBS’s estimated daily loss of $400,000 is small coin in relation to the company’s total revenue: In the second quarter, the Eye reported $3.7 billion in revenue and net income of $472 million.

Meanwhile, Time Warner Cable also stands see financial losses mount the longer the feud continues, as disgruntled customers cancel. UBS did not have estimates on the effect of the blackout on the cable operator.

CBS said Sunday that the companies were not actively negotiating. The Eye said Time Warner Cable rejected an offer to extend their previous deal while talks continued, but the cable operator disputed that and claimed it offered CBS a one-year extension.

Prior broadcast and cable blackouts have had limited effect on stock prices, according to UBS. The firm cited Fox’s 15-day outage on Cablevision in 2010, a 28-day blackout of Fox cable channels on Dish Network in 2010, and Viacom’s nine-day blackout on DirecTV last summer as having had little impact on share prices.

More Biz

  • Why the Oscars, Emmys Shouldn't Try

    Grammys Deny Allegations of ‘Rigging’ Nominations

    Among the many allegations in ousted Recording Academy chief Deborah Dugan’s bombshell complaint Tuesday was a claim that the nominations are marred by what she has described as “rigging.” The example in the complaint points to the 2019 Best Song category, where an unidentified artist who was represented by a board member moved from the [...]

  • Annabella Sciorra

    Weinstein Lawyer Aims to Poke Holes in Annabella Sciorra's Account

    Harvey Weinstein’s defense attorney sought to poke holes in Annabella Sciorra’s testimony on Thursday, highlighting her training as an actor in a bid to undermine her credibility. Attorney Donna Rotunno had previewed that line of argument in a CNN interview before the trial, which prompted the prosecution to accuse her of disparaging the witness. “In [...]

  • Lindsey Elfenbein Variety

    Lindsey Elfenbein Promoted to Variety's Managing Director, Global Summits and Strategic Partnerships

    Variety has promoted Lindsey Elfenbein to managing director, global summits and strategic partnerships. Elfenbein joined the trade publication in 2014, where she has exponentially grown the conference business. Elfenbein is responsible for driving global revenue across Variety’s summit series. Her contributions have led to the creation of new ventures including the Silicon Valleywood Summit with [...]

  • Sunita Mani and John Reynolds appear

    Keshet Studios Sets Pact With Entrepreneur Ori Allon to Expand Content Development

    Keshet Studios, the producer behind the Sundance entry “Save Yourselves!,” has partnered with tech entrepreneur Ori Allon to jointly develop and finance movies for the global market. Allon, founder and executive chairman of the digital real estate firm Compass, launched his White Lodge Productions banner in 2018 with the goal of creating high-end content that [...]

More From Our Brands

Access exclusive content