Time Warner, CBS dispute continues
Time Warner Cable’s blackout of CBS continued Saturday, and neither side indicated a resolution of their dispute over fees is imminent.
Time Warner dropped CBS Friday in New York, Los Angeles, Dallas and several other cities, leaving three million customers without the network’s programs. The issue is fees that the cable company pays CBS to air its programs.
Each has accused the other of making unreasonable demands. On Saturday the two sides even seemed to disagree on the status of negotiations. A Time Warner spokeswoman said Saturday afternoon that negotiations are ongoing. CBS said it expects talks to resume soon, but the decision rests with Time Warner.
Without a deal, Time Warner customers were missing Tiger Woods’ attempt at his 8th win at Firestone Country Club near Akron, Ohio, in this weekend’s Bridgestone Invitational. Woods held a lead of 7 strokes as he played Saturday. CBS fans also won’t see programs such as “Under the Dome” or “60 Minutes.”
Time Warner cut off the CBS shows as well as cable networks Showtime, TMC, Flix and Smithsonian. The cable company’s customers are caught in the middle, and the stakes will only go higher. CBS will air the PGA’s final major tournament starting Thursday, and its preseason National Football League coverage begins on local stations next week.
Late Friday night, Time Warner posted a message to subscribers on its website from CEO Glenn Britt saying that CBS has been “uncompromising” by making demands that are inconsistent with deals made with hundreds of other broadcasters. If Time Warner gives in to CBS’ demands, he said, then other programmers will ask for more as well.
“Cable TV bills would skyrocket. You’d be mad. We’d be mad. It won’t end well for anyone,” Britt wrote.
Time Warner charges about $20 monthly per subscriber for broadcast channels. One industry analyst estimates that CBS got 75 cents to $1 per Time Warner subscriber in the contract that recently expired.
CBS said this is the first time it’s been dropped by a cable system, and it has successfully negotiated deals with Comcast, Cablevision, Charter, DirecTV, AT&T, Verizon and other companies.
“CBS programs are among the most popular in the industry, and yet there are many cable networks – with considerably less viewership – that receive more money for their programming from Time Warner Cable than we do,” CBS CEO Leslie Moonves said in July memo to employees.
The fight could be a long one with CBS trying to gain revenue from retransmission fees to buffer against cyclical swings in advertising revenue and Time Warner caught in a competitive environment that limits price increases to pay for rising programming costs.
Research firm SNL Kagan estimates retransmission fees paid to programmers will reach $3 billion industry-wide this year and double to $6 billion by 2018.