Cable Operators

Liberty Starz in Carriage Talks With Comcast, Time Warner Cable

3/02/2010 6:22 PM Eastern

While retransmission-consent battles raged on other fronts this week, Liberty Media CEO Greg Maffei told an audience at an industry conference Tuesday that carriage talks between its Liberty Starz premium channel and major distributors will likely be resolved amicably.
Maffei said at the Morgan Stanley Technology, Media & Telecom conference in San Francisco that Starz is currently in talks with Comcast and Time Warner Cable regarding carriage of the premium channel. He added that he suspects that talks with Comcast will be resolved soon, while Time Warner Cable, which is already out of contract with the programmer, may take a little longer.
Starz also has a distribution agreement with Netflix that has caused some agita among cable operators. And while Maffei said that is probably not a favorite of cable distributors, he doesn't believe it is a deal breaker.
"We are in the midst of negotiating with Comcast and both companies have said publicly we are very close to a deal and I fully expect we will have a renewal with Comcast," Maffei said. "We are out of contract with Time Warner Cable. We would love to improve our relationship with Time Warner Cable and, in fact,[Starz CEO] Chris Albrecht is today at Time Warner Cable, seeing senior management there.
"That having been said, Time Warner Cable is a massive under hitter for us already," Maffei added. "If you look at our penetration among telcos, satellite companies and cable companies, Time Warner is a place which in general is not as strong in premiums and has never been strong with Starz. There is upside really there, more than downside."
Maffei added that Starz also is in negotiations with The Walt Disney Co. regarding its studio output. He suspects that deal will be done soon as well.
"I think we will end up having a Disney renewal, we have a good relationship with Disney, and the terms of the deal will look a lot like the terms of the existing deal," Maffei said.
While the tone of the cable negotiations appears to be much different than other recent carriage battles between Fox broadcasting and Time Warner Cable and Cablevision's ongoing dust-up with Disney's WABC-TV channel in New York, Maffei said the difference is the fee structure. Cable operators can easily pass on costs of premium channels. Such is not always the case with broadcast and cable networks.
"We are partners with these guys in a way that is attractive for most of them," Maffei said of distributors. "They buy for X and they sell for X-plus. Every premium unit they sell is more money to them. This is not the case like in most of basic cable where we're trying to take money from them and it's very hard for them to pass it through."
Maffei also praised the turnaround at another of Liberty's assets, home shopping network QVC Inc. In the fourth quarter, QVC's domestic revenue rose 13% and cash flow increased by 32% after several quarters of sluggish growth.
Maffei attributed the turnaround to QVC's management, led by CEO Mike George, which revamped the company's product lines, sets and promotions.

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