Policy

Retrans Stakes Rising for Cox

1/09/2005 7:00 PM Eastern

If a raging retransmission-consent dispute isn’t resolved, Cox Communications Inc. will lose carriage of several additional Nexstar Broadcasting Group TV stations at the end of this month.

In the meantime, last week the head of Emmis Communications Corp. lauded Nexstar for taking a stand against Cox and Cable One Inc., and for demanding cash for carriage of its TV stations.

“I want to publicly applaud Perry [Sook, Nexstar’s president],” Emmis chairman Jeff Smulyan said during a third-quarter earnings call with analysts last Thursday. “This is the greatest issue in this industry, and I just can’t stress enough the fact that it is an issue that must be addressed.”

Smulyan told analysts: “It is impossible for the American broadcast industry to continue to give its signal away to people who are charging billions of dollars a year, when the fact is that we are the most watched part of all of those cable systems by far — by a ratio in many cases of 10-to-1, 20-to-1, 100-to-1 — and yet the only part of the system that doesn’t get paid are the local broadcasters. It must be addressed.”

For more than a week now, five of Nexstar’s TV stations have been off the lineups of both Cox and Cable One Inc. Effective Jan. 1, when old retransmission-consent deals expired, Cable One had to stop carrying NBC affiliate KTAL in Texarkana, Texas; and Joplin, Mo., stations KODE, an ABC affiliate, and KSNF, an NBC station.

Cox, in turn, had to drop two Texas stations: NBC affiliate KRBC and CBS affiliate KLST.

In the latest chapter to the saga, Cox’s systems in the Carthage, Mo., area will lose the same stations Cable One did — KODE and KSNF — at the end of January.

Similarly, several of Cox’s small systems in the Shreveport, La.-Texarkana, Texas, DMA, will be losing KTAL, as Cable One did.

The Atlanta-based MSO claims it is considering going to the Federal Communications Commission for help with its dispute with Nexstar.

“The FCC does require broadcasters to participate in good-faith negotiations,” Cox spokesman Dave Grabert said last week. “I don’t think they [Nexstar] have really lived up to that.”

Cox also claims that it didn’t get the required formal 45-day notice from Nexstar about the broadcaster’s termination of rollover agreements for the additional stations to be dropped.

Nexstar chief operating officer Duane Lammers maintained Cox was properly notified that the broadcaster would not extend those deals, but didn’t want to go to court with the cable operator over whether those additional stations go off the MSO’s lineup Jan. 31 versus Dec. 31.

Cox officials said that cash for carriage is in fact an option the MSO would consider negotiating in exchange for retransmission consent. But Cox will not guarantee any broadcaster cash before even sitting down at the bargaining table, according spokesman Dave Grabert — and that’s the demand Nexstar is making.

Grabert added that Cox, of course, would prefer to avoid paying cash. The Atlanta-based MSO has also said that the monthly 30 cent-per-subscriber license fee Nexstar is seeking for each of its stations isn’t reasonable.

The broadcaster is holding tight to its cash-for-carriage position.

“Make absolutely no mistake: Any cable operator who is carrying our station without a subscriber fee, if that contract expires now or in the future, they will not be carrying our station absent a subscriber payment,” Lammers said. “This is our company position. This, I believe, is going to become the industry standard.”

Lammers, after citing Smulyan’s remarks and support, claimed that Cable One is “suffering massive customer losses” in Joplin, with subscribers switching to Dish Network. But Tom Basinger, vice president of Cable One’s central division, asserted the impact has been minimal.

September