Comcast, CBS Agree on Retrans

By Mike Farrell -- Multichannel News, 8/9/2010 12:01:00 AM

Comcast and CBS struck a note of retransmission peace, reaching a 10-year agreement between the biggest cable operator and an aggressive broadcaster more than a year before their old deal would expire.

Comcast avoids a potentially embarrassing retransmission battle while it seeks federal approval for its NBC Universal joint venture. CBS gains more retransmission cash (either directly, or through higher fees for Showtime) and secures a significant carriage increase for two smaller cable networks.

Financial terms were not disclosed. But both companies said publicly that the new pact includes more robust carriage for the Showtime Networks premium channels (including an online component), Comcast’s promise to launch the Smithsonian Channel and a pledge to extend the reach of CBS College Sports Network.

CBS has aggressively sought retransmission cash and has said it expects its total retransmission haul to be in the $100 million range this year. CBS CEO Les Moonves said during the CBS earnings call last week the broadcaster was on track to achieve its goal of $250 million in annual retransmission revenue by 2012.

“This does a lot more than recognize the value of CBS entertainment, news and sports programming on Comcast’s cable television plat form,” Moonves said. “It also includes online and VOD distribution and enhances the long-term growth of Showtime and improves the economics of CBS College Sports and the Smithsonian Channel. This is a great deal for both parties.”

CBS estimates it has completed about 60 retransmission agreements, including deals last year with Time Warner Cable, Verizon Communications and Cablevision Systems.

Coming up on the retransmission front, Time Warner Cable’s carriage agreement with The Walt Disney Co. (for the ABC broadcast network and cable channels like ESPN) expires Sept. 1, while the Cablevision Systems retransmission deal with Fox Broadcasting expires in October.

SNL Kagan estimates Smithsonian Channel is available in about 9.2 million homes and receives an average carriage fee of 23 cents per subscriber per month. CBS Col lege Sports, available in about 36 million homes, was attracting about 20 cents per subscriber per month, according to SNL Kagan.

People familiar with the deal said Comcast will launch Smithsonian beginning next summer in select digital markets. Comcast has about 19.2 million digital video customers.

CBS College Sports already is available to some Comcast customers on a digital or sports tier. The new agreement will broaden that base as well.