You will be redirected back to your article in seconds

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

Broadcaster’s stations in NY, LA, Dallas and five other markets could go dark on MSO July 24

It could be a long, hot summer for Time Warner Cable and CBS, whose contract fight has erupted into a public war of words in one of the biggest TV distribution battles to date.

About 3 million Time Warner Cable subscribers in New York, Los Angeles, Dallas and five other markets could lose CBS-owned TV stations on July 24, with the two sides currently deadlocked over retransmission fees. For now negotiations are continuing, with the deadline next Wednesday at 5 p.m. Eastern.

CBS “appears ready to pull signal from Time Warner Cable to achieve what it believes is a fair-market retransmission-consent fee rate as negotiations between the two are stalling,” RBC Capital Markets analyst David Bank said in a report Friday.

The Eye, unlike other broadcasters, has never allowed local TV stations to go dark in a contract dispute. But now, CBS is taking a much more aggressive stance as it tries to boost retrans revenue. CBS is aiming to bring in $500 million in retrans fees this year, roughly double 2012.

Time Warner Cable is holding your favorite shows hostage,” CBS says in TV ads that started running Thursday in affected markets, pointing viewers to KeepCBS.com. The broadcaster claims it’s continuing to work in “good faith” to resolve the dispute but warns that “Time Warner Cable might drop CBS from its TV lineup.”

Time Warner Cable, for its part, asserts 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. TWC is running newspaper ads in New York, L.A. and Dallas urging customers to “contact Congress” and has its own site at TWCConversations.com with its talking points.

“CBS is driving up the cost of cable TV — charging higher and higher prices for shows they give away for free online and over the air,” the ads say. “It’s time to stand up and say no to broadcasters demanding unreasonable prices.”

SEE ALSO: CBS Comes Out Swinging Against Time Warner Cable in Contract Fight

Currently Time Warner Cable pays between 75 cents and $1 per sub monthly for CBS, which is now likely seeking around $2 per subscriber, according Bank.

Since TWC and CBS last struck their broad agreement in 2008, “We believe there has been a significant ‘re-value’ for broadcast network TV content since that time due to a number of factors including increased VOD and potential TV Everywhere utility, the higher cost of sports programming (especially NFL) and a more competitive distribution environment where demand has increased for quality content,” Bank wrote.

CBS seems to be “massively under-indexing on affiliate fees,” Bank wrote. Despite the Eye’s No. 1 position in primetime ratings, and an average audience six times what is typical for the top 20 cable networks, CBS currently earns monthly fees on par with top cablers, he said.

Other analysts also say CBS is in a strong position to demand more money for its stations, and will use the upcoming National Football League season as leverage in the fight with TWC. CBS-owned stations reach about 25% of Time Warner Cable’s 11.9 million video subscribers (about 3 million) while TWC households account for only 2% to 3% of CBS’s total audience, according to Davenport & Co. analyst Michael Morris.

“We understand that distributors will work to be vigilant about controlling costs,” Morris wrote in a research note. “However, we see them in a significantly weaker position when it comes to retransmission renegotiations with the major station owners… overall, TWC economics are significantly more at risk in a potential disruption.”

But BTIG Research analyst Rich Greenfield believes the leverage in this battle is far more balanced than in past retrans and programming disputes: “CBS would be making a critical mistake to think it had an overwhelmingly strong negotiating position,” he wrote in a blog post.

A total of 13 CBS-owned stations in eight Time Warner Cable markets are at risk: WCBS and WLNY (independent) in New York; KCBS and KCAL (independent) in L.A.; KTVT and KTXA (independent) in Dallas; WBZ and WSBK (independent) in Boston; KDKA and WPCW (The CW) in Pittsburgh; WBBM in Chicago; WKBD (The CW) in Detroit; and KCNC in Denver.

TWC and CBS also are negotiating carriage terms for Showtime Networks and Smithsonian Channel among other cable nets. However, according to a source familiar with the talks, those deals could be done separately from the CBS TV stations, which are a far bigger bone of contention. Carriage of TVGN (formerly TV Guide Network), a 50-50 partnership between CBS and Lionsgate, is not part of the talks.

The companies’ prior agreement from 2008 expired June 30. They extended it through July 24 while talks continued, but it now appears unlikely that CBS will agree to postpone the deadline again.

More Biz

  • Juice WRLD - Jarad HigginsWireless Festival,

    Juice Wrld Streams Climb Nearly 500% After His Death

    As often happens after an unexpected death, Juice Wrld’s music soared in popularity after his passing on Sunday, with streams climbing nearly 500% on that day alone. On-demand audio streams for the rapper, who died at the age of 21 after suffering a seizure at Chicago’s Midway Airport, climbed 487% on Sunday to more than [...]

  • Netflix headquarters in Los Gatos, California,

    Netflix Ordered to Stop Poaching Fox Employees

    A court on Tuesday issued an injunction barring Netflix from poaching employees from Fox and confirming the validity of fixed-term employment agreements. The ruling marks a hard-fought victory for Fox — now owned by Disney — which set out three years ago to stop Netflix from raiding its employees. Netflix had sought to invalidate Fox’s [...]

  • Harry Styles performs at the Greek

    First Look at Harry Styles' Ticket-Giveaway Bus (EXCLUSIVE)

    Harry Styles announced Tuesday he is partnering with American Express to give away tickets to his concert at the Forum in Los Angeles on Friday — on a special custom bus. At the show, “Harry Styles Fine Line Live: One Night Only!,” the singer is expected to perform his entire new album, which is also [...]

  • Weeknd

    The Weeknd Takes Top Two Spots on Rolling Stone Singles Chart

    Fighting off a seasonal surge from Mariah Carey’s “All I Want for Christmas Is You,” The Weeknd’s two new singles topped the Rolling Stone Top 100 songs chart this week. “Heartless” and “Blinding Lights,” both of which dropped last week, rocketed to No. 1 and 2 respectively with more than 40 million streams between them. [...]

  • The Olympic Rings adorn an event

    NBCUniversal Expects More Than $1.2 Billion in Ads for Tokyo Olympics

    Madison Avenue is rushing to get money down in NBCUniversal’s broadcast of the 2020 Olympics from Tokyo, the latest big TV-sports event to spark heavier demand from advertisers at a time when finding truly big media audiences has grown more difficult. NBCUniversal said it is on track to take in more than the $1.2 billion [...]

  • CAA Promotes Seven to Agent

    CAA Promotes Seven to Agent

    In its annual end of the year promotions, CAA has announced it has upped seven trainees to agent. Julie Greenberg has been promoted to in the company’s touring division, which books many of the top global musical and comedic talent. Based in Nashville, Greenberg will focus on music touring. Los Angeles-based Natalie Moran has been [...]

  • Harvey Weinstein cane

    Harvey Weinstein to Have Back Surgery This Week

    Harvey Weinstein will have back surgery this week, after he was injured in a car crash in August. Weinstein looked frail and gaunt when he appeared at a bail hearing on Friday, as he walked into the court with a cane and sometimes leaned on an assistant. Weinstein is due back in court on Wednesday. [...]

More From Our Brands

Access exclusive content