Policy

Time Warner, LIN Continue Retrans Talks

10/06/2008 10:34 AM Eastern

Time Warner Cable and LIN TV Monday continued negotiations to try to reach a new retransmission-consent deal, as 15 TV stations remained dark on cable in 11 markets.

Spokeswomen for both the nation’s second-largest cable company and LIN TV said that talks were taking place Monday, negotiations that have continued since the broadcaster pulled its signals last Friday.

Dish Network is offering a $50 MasterCard to new subscribers in the markets were the LIN stations went dark. The offer is valid through Oct. 12. The satellite provider has seen an uptick of calls in those markets, a Dish Network spokeswoman said Monday. 

The markets involved in the fray are Green Bay, Wis.; Austin, Texas; Buffalo, N.Y.; Columbus, Ohio; Dayton, Ohio; Fort Wayne, Ind.; Indianapolis; Mobile, Ala.; Springfield, Mass.; Terre Haute, Ind., and Toledo, Ohio. Time Warner says 1.5 million of its subscribers are affected.

In Indianapolis, the actual operator that had been carrying three LIN-owned stations and the broadcaster’s local weather channel is Bright House Networks, with about 106,000 subscribers affected. Bright House has a business relationship with Time Warner, which negotiates its retransmission-consent deals in that market.

LIN TV is seeking cash compensation, an estimated 30-cent license fee, for carriage of its stations, payments that Time Warner says it won’t fork over for signals that are available for free over the air. The potential license fees add up to millions of dollars, according to Time Warner, that will burden subscribers.

On Monday, Sanford Bernstein analyst Craig Moffett re-issued a September report he did on Time Warner Cable, in which he predicted that the cable company will wind up paying Univision “and others” for retransmission-consent to carry their TV stations.

In the report, Moffett addressed the cable operator’s looming talks on that front with Univision.

“To be clear, we fully expect that TWC will end up paying Univision (and others),” Moffett wrote. “But the risks must be kept in the context of not absolute, but instead relative retrans fees, and what can and can't be passed on to consumers.”

Moffett’s report focused on coming talks with Univision, which is opting for retransmission consent this year, reportedly seeking a $1 license fee for its stations.

“The fear is that, if TWC fails to reach a retrans carriage deal with, say, Spanish Language broadcaster Univision and if Univision goes off-air on TWC systems in New York, Texas, and Los Angeles, then its Spanish language subscribers will leave for satellite,” Moffett wrote. 

“But the pain experienced by distributors and broadcasters is felt asymmetrically,” he said. “Subscribers leave distributors only slowly, when they (finally) conclude they can't wait for the programming dispute to be resolved. But pain is felt by broadcasters immediately, in the form of lost advertising revenues when their distribution suddenly drops.” 

Moffett noted that the Spanish-language broadcaster would suffer a loss of ad revenue if it pulled its station signals from Time Warner.

“While it is beyond the scope of this report to specifically forecast the precise terms of a likely settlement (which, in any case, will almost certainly not be disclosed), one must assume that Univision's willingness to endure a signal blackout is severely constrained by its huge reliance on ad revenues delivered across Time Warner Cable's network – ad revenues that would immediately and permanently be lost in the event of a such a dispute,” he wrote.

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