Policy

TWC, Sinclair Make Peace

1/24/2011 12:01 AM Eastern

Time Warner Cable and Sinclair Broadcast
Group last week managed to avoid what was brewing
to be a contentious retransmission-consent battle,
reaching an agreement in principle that will keep the
broadcaster’s 28 stations
on the air in several
of the cable company’s
markets.

Time Warner Cable
and Sinclair said they
reached the agreement
in principle on Jan. 15
and expected to work
out the final details
by Jan. 28. Terms of
the deal were not disclosed.

The Sinclair stations
were set to go dark at
11:59 p.m. on Dec. 31
in several Time Warner
Cable markets including
Buffalo, N.Y.,
San Antonio, Texas,
and Cincinnati, representing
about 4 million
cable customers.
After a pair of extensions
pushed the deadline
to Jan. 15, the two sides managed to hammer out the
beginnings of a deal.

“We’re pleased to reach an agreement with Sinclair
Broadcasting without any interruption in service for our
customers,” Time Warner Cable president and chief operating
officer Rob Marcus said in a statement. “We appreciate
our customers’ patience and support throughout this
negotiation and thank them for their patronage.”

While none of the Sinclair stations went dark during the
negotiations, most analysts believe that Time Warner Cable
had the upper hand in the talks, because it claimed to
have access to outside stations to replace the Sinclair signals
in the event of an outage. According to Time Warner
Cable, it had access to programming from the four major
broadcast networks, either through importing other
broadcast stations or in the case of the Fox network, the
ability to air the national network feed in the event its Sinclair
affiliate went dark. Fox has stated that it preferred
that Time Warner Cable carry Sinclair’s signal.

In a research note written after the two sides
had extended negotiations the first time (to Jan.
14), BTIG media analyst Richard Greenfield
wrote that the negotiating leverage in the dispute
seemed to rest with Time Warner Cable. The parties
later agreed to extend negotiations through
Jan. 15.

“Initially, you might view an extension as both
parties being kind to consumers so that they do
not lose any key programming during the holidays,”
Greenfield wrote on Jan. 3. “However, we
believe Sinclair must have realized it did not have
much leverage over Time Warner Cable as Sinclair’s
leverage would appear to drop significantly
two weeks from now.”

He added
that he expected
any deal to
be “notably
better” than
prior agreements
with
other broadcasters.

Time Warner Cable had successfully imported signals
in an earlier dispute with Smith Media in Utica, N.Y.
and Burlington, Vt. In those cases, Time Warner Cable
was able to import a Wilkes-Barre, Pa., NBC station to
Utica and a Utica ABC affi liate and a Watertown, N.Y.,
Fox affiliate to Burlington after the Smith stations went
dark on Dec. 15. Time Warner Cable and Smith Media
reached a deal on Jan. 8.

Sinclair also reached a tentative pact with Bright House
Networks on Jan. 14 covering five stations. According to reports,
the parties have through Jan. 21 to finalize the deal.
Typically, Time Warner Cable handles programming negotiations
for BHN.

March