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Time Warner Cable's Retrans Disputes Simmer under Extensions

Negotiations Continue with Journal Broadcast, CBS 7/12/2013 9:37 AM Eastern

As the summer heats up,  a pair of retransmission-consent disputes involving Time Warner Cable continue to simmer last.

The dispute between Journal Broadcast and Time Warner Cable has taken a turn, with the station owner retaining the position for five of its outlets on the cable operator’s systems through July 24 via the so-called sweeps rule. However, some of the station group’s digital properties are no longer available to the operator’s subscribers.

Meanwhile, there has been no disruption in service for CBS owned-and-operated stations in the MSO's footprint or for cable properties Showtime, CBS Sports Network and Smithsonian Channel, as both parties continue to operate under an extension that carries toward the end of July.

More station groups have been seeking significant increases in retransmission consent fees in recent years, providing them with an enhanced revenue stream that has led in part to merger activity within the sector, including Tribune’s purchase of 19 stations from Local TV.

In both cases, retransmission- and carriage contracts with TWC were set to expire at 11:59 p.m. on June 30. Journal Broadcast’s six stations -- WGBA (NBC) and WACY (MNT) in Green Bay; WTMJ (NBC) in Milwaukee; KMTV (CBS) in Omaha; and KMIR (NBC) and KPSE (MNT) in Palm Springs – remained on TWC systems through July 10 under a 10-day extension as the parties continued to negotiate.  Journal Broadcast said it had offered a 30-day extension period, but the cable operator only agreed to the shorter term.

When the parties could not conclude a new deal on July 10, Journal Broadcast invoked the so-called sweeps rule, which has kept five of its station on TWC’s systems. Under FCC retransmission-consent rules, local commercial television stations cannot be removed during a sweeps period. Journal Broadcast said that “we have chosen to remain on the air during the July ratings period, which ends at midnight July 24.”

The FCC rules, however, do not pertain to low-power outlets like KPSE in Palm Springs, or the sub-channels Journal Broadcast runs alongside Milwauke's WTMJ-TV, which is flanked by a weather service, as well as the Live Well Network lifestyle network, and Me TV in Green Bay. By law in the absence of a retrans accord, TWC no longer has the permission to air KPSE and the sub-channels, which were disconnected when the extension expired at 11:59 p.m. on July 10.

Journal Broadcast can withdraw its stations’ signals before July 24, but is unlikely to avail itself of that option, having committed to bringing content to its audience.

"Journal Broadcast Group remains focused on serving the viewers in our markets with quality local news, information and entertainment programming," said the company in a statement. "Unfortunately, so far Time Warner has refused place a fair, market-based value on the rights to carry our stations. Reaching that agreement remains important for us, but not to the point of risking long term harm to our stations or businesses."

The American Television Alliance, whose members include Time Warner Cable, Dish, Cablevision and Charter, decried the recent retransmission dispute, issuing the following statement:“Broadcasters have no problem taking down their signal right before the World Series, the Super Bowl and other marquee events, in order to gain more leverage, but when a dispute interferes with ‘sweeps’ period, they suddenly oppose blackouts. Consumers deserve rules that protect them from blackouts at all times, not just when it’s beneficial to broadcasters."

KPSE began carrying a potential removal message during the afternoon of July10, according to Journal Broadcast. Last month, the other five stations in TWC’s footprint also had been running similar messaging, which was halted after the 10-day extension was reached. A Journal Broadcast website, at press time, was alerting users/viewers about a potential disconnect late on July 24.

Time Warner Cable has said that has been seeking a 200% increase in fees for the stations' signals, while the station owner – which said that it has negotiated 140 retransmission-consent agreements over the past six year -- countered by saying that translates into pennies per subscriber. 

The stakes are higher in the CBS negotiations. Los Angeles Times reported that TWC is now paying the CBS stations well under $1 per subscriber. CBS, having long been the most-watched broadcast network, has chosen an aggressive course when it comes to retrans, recording a 62% rise in payments from cable, satellite and telco TV providers in the first quarter of 2013. The company is seeking up to $500 million in total retrans fees in 2013, and a new contract figures to be pricey for Time Warner Cable.

Under an extension CBS granted last month that runs to late July, TWC continues to air CBS's O&Os in its footprint, including WCBS-TV New York, KCBS-TV Los Angeles and KTVT-TV in Dallas-Ft. Worth, plus CBS Sports Network, Smithsonian Channel and Showtime.

The premium network, which splits consumer payments with the distributors that carry it, has been enjoying strong ratings with Ray Donovan, its first original series ever to drive audience increases from its premiere on June 30 to its second installment the following week, and the final season of its biggest show, serial killer skein, Dexter. Any disconnect could undermine those performances and block a revenue stream, while CBS viewers could miss the adaptation of Stephen King’s Under the Dome, which has been TV’s biggest summer hit.

The stronger negotiating leverage CBS might enjoy through TWC customers' possible loss of high-profile NFL and college football action, as well as the U.S Open Tennis Championships, doesn’t arrive until early September.

TWC and CBS officials said negotiations are continuing.

 

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