CBS/TWC settlement seen as CBS victory


CBSAccording to Marci Ryvicker of Wells Fargo, it appears that CBS fared best as the hostilities between it and Time Warner Cable came to an end. Meanwhile, Acting FCC Chairwoman Mignon Clyburn asked that companies involved in negotiations put their audiences ahead of their own desires.

The statement of TWC’s Glenn Britt was part of the rationale for Ryvicker’s declaration that CBS came out on top. In particular, she flagged his remark, “…we certainly didn’t get everything we wanted…”

Ryvicker said that according to Wells Fargo sources, TWC moved further than CBS in order to strike the final bargain. It is believed that the deal will be similar to the one CBS recently struck with Verizon’s FiOS service, which among other things sets the price of CBS per subscriber at $2.

For one thing, she noted that CBS will receive compensation retroactive to the expiration of the previous deal. That comes on top of a significant downside for TWC – the loss of subscribers to other MVPDs or to simple cord-cutting during the month-long loss of services, estimated at 7%.

All in all, noted Ryvicker, “…it sounds like CBS prevailed, which should be a positive catalyst for CBS and all broadcast stocks.”

Clyburn expressed her pleasure with the agreement. She said, “I am pleased CBS and Time Warner Cable have resolved their retransmission consent negotiations, which for too long have deprived millions of consumers of access to CBS programming.  At the end of the day, media companies should accept shared responsibility for putting their audience’s interests above other interests and do all they can to avoid these kinds of disputes in the future.”

The American Cable Association used the occasion to repeat its charge that the retransmission consent process is broken and that broadcasters are the reason. It has recently called for a standstill during negotiation impasses that would eliminate blackouts, among other things.

NAB’s Dennis Wharton said, “NAB is pleased that an agreement was reached. We believe broadcasters deserve to be fairly compensated for the most-watched programming on television. The unfortunate reality is that in the last two years, 89% of all retransmission consent disruptions have involved three companies: Time Warner Cable, DirecTV and DISH. Rather than create a manufactured ‘crisis’ that would inject government into the free-market, these three firms might better spend their time working toward amicable resolutions over TV programming most valued by viewers.”

The National Association of Broadcasters also noted an agreement for retransmission consent was reached between Quincy Newspaper television station KTIV, which brings NBC, CW and MeTV fare to the Sioux City IA DMA, and CableOne. It lacked the drama of the CBS/TWC confrontation, and was concluded without any disruption of service, as is the case, said NAB, about 99% of the time.