The new distribution contract CBS signed with Time Warner Cable last summer could be a casualty of Comcast’s takeover of Time Warner Cable. The deal reportedly does not include provisions protecting all terms of the pact should TWC be acquired.
According to an LA Times story, the merger language does not include provisions protecting all the terms should Time Warner Cable be acquired by a distributor with a sweeter arrangement: “Terms of the CBS-Time Warner Cable pact were never publicly disclosed, but Comcast, which signed a 10-year distribution agreement with CBS in 2010, is believed to be paying a lower fee to carry the network’s TV stations. Should Comcast get regulatory approval of the Time Warner Cable purchase, it can carry CBS under its current deal. Not every aspect of the CBS-Time Warner Cable accord would automatically transfer to Comcast, including many digital rights, a person close to the matter said. That could benefit CBS down the road.”
One of the concerns of programmers is that a marriage of Comcast and Time Warner Cable would give one company too much leverage in contract negotiations with content providers. Combined, Comcast and Time Warner Cable would have 30 million subscribers around the country, including some of the nation’s biggest markets, said the story.
CBS banks on fees from MVPDs to help cover its programming costs, including sports. The company said last week that such fees would hit $2 billion by 2020 and said a Comcast acquisition of Time Warner Cable won’t alter that projection. Before the deal is approved, CBS may have an opening to renegotiate its deal with them in the coming months.