News

Deals Wanted

12/21/2003 7:00 PM Eastern

As 2003 draws to a close, negotiations between several operators and networks over carriage deals set to end on Dec. 31 are going down to the wire, with little certainty of resolution.

On the other side of the spectrum, Comcast Corp. and Viacom Inc. finalized a comprehensive, long-term carriage deal encompassing Viacom Inc.'s top networks, including broadcaster CBS, MTV: Music Television, Nickelodeon and Black Entertainment Television, executives from both companies say. (See related story, page 25.)

Viacom is still in the throes of negotiating with direct-broadcast satellite provider EchoStar Communications Corp. to extend Dish Network distribution deals for several undisclosed networks that expire on Dec. 31, according to an MTV spokeswoman, who would not provide further details.

EchoStar executives would not comment on negotiations.

Sources close to both parties said that if a deal isn't reached by the end of the year, it's unlikely that EchoStar would pull the plug on the services, but rather extend the existing agreement.

More tenuous for the satellite service are its renegotiation talks with Turner Broadcasting System Inc. for several of its key services.

EchoStar executives say they're "concerned" about TBS's proposed licensing-fee increases for Cable News Network, CNNfn, Boomerang, Cartoon Network, Turner Classic Movies, Turner South and Headline News, although they would not provide specific details.

EchoStar last year reached long-term distribution deals for Turner Network Television and TBS Superstation.

Spokesman Steve Caulk said the company has adequate alternatives already on its Dish Network lineups if it cannot reach an agreement with Turner for its various services.

Turner "has been making demands that we believe are unreasonable and we don't want to have to pass those kinds of rate increases onto our customers," Caulk said. "Our main objective is to protect the consumers from rate increases that we don't want to have to pass along."

A Turner spokeswoman would only say that the company is in the midst of negotiations and "does not intend to negotiate in the press."

EchoStar competitor DirecTV Inc. has its own carriage renewal battles on its plate with Universal Television Group-owned Trio. The issue came to the forefront two weeks ago, when DirecTV ran a crawl on Trio's designated channel slot alerting its customers that the network would be dropped if it could not finalize a carriage agreement with Trio by Dec. 31.

The satellite service has since pulled the crawl and is negotiating with Universal to finalize the agreement, according to company officials.

Representatives from neither Trio nor DirecTV would comment further on the matter.

N.Y. Sports Flap

Meanwhile, Time Warner Inc. last week went public with its contract spat with Cablevision Systems Corp. Inc. over that company's New York-area regional sports network.

As contracts with the regional sports networks were set to expire Dec. 31, Time Warner Cable ran an advertisement in New York-area newspapers last Thursday and Friday indicating that its subscribers might not be able to watch Madison Square Garden Network and Fox Sports New York beginning Jan. 1.

In the ad, Time Warner wrote that it has been negotiating in good faith with Cablevision Systems Corp., which owns both regional sports networks, but Cablevision has made unreasonable financial demands. Time Warner officials said it had no plans to re-run the ads in the near future.

Time Warner said it has offered to keep carrying the networks on an month-to-month basis at its current rate, as negotiations continue. "But Cablevision has said 'no' again," according to the ad, which concluded with Time Warner saying it will offer a $2-per-month rebate if "Cablevision carries out this threat to take these channels away" and that it will continue to update the situation.

According to sources, Time Warner is currently paying Cablevision a combined $3.70 per month, per subscriber for the two networks.

Sources familiar with the situation said Cablevision is also trying to tie contract terms for the regional sports networks — which air games from Major League Baseball's New York Mets, the National Basketball Association's New York Knicks and the National Hockey League's New York Rangers, Islanders and New Jersey Devils — to carriage of its MetroChannels services. Cablevision also owns the Knicks and the Rangers.

"We have been negotiating with Cablevision and still hope to come to an agreement by the end of the year," a Time Warner spokesman said. "We need to let our customers know about this situation."

Cablevision's Take

For its part, Cablevision issued the following statement: "As part of its full-scale attack on [Rainbow Media Holdings Inc.'s] networks, including AMC, Time Warner Cable is now publicly threatening to drop MSG Network and Fox Sports Net New York from its cable systems."

The statement continued, "We have offered Time Warner Cable the opportunity to allow its customers to choose whether or not to receive these well-established regional sports networks. Time Warner Cable has demonstrated a reckless and cynical approach to these negotiations in an attempt to extract unreasonable terms from a programmer."

On Dec. 4, Time Warner Entertainment L.P. filed a countersuit against American Movie Classics Co., arguing that it was within its contractual right to terminate Time Warner Cable's current AMC carriage pact.

The suit, filed in New York State Supreme Court, countered a Nov. 14 action brought by AMC against Time Warner that sought to bar the MSO from ending its distribution deal with the network Dec. 31 due to programming changes.

Mike Reynolds contributed to this story.

Pre-New Year's Eve Hangovers As Dec. 31 contract deadlines approach, networks and carriers are scrambling to come to terms that would avert any service disruptions. The following is a scorecard as to where some parties stand in their discussions.
Distributor Programmer Status
DirecTV Trio Negotiating toward a resolution that should keep the network on the DBS giant's air.
Time Warner Cable AMC Embroiled in legal action, with the movie channel's fate perhaps entwined with Rainbow Sports network carriage.
Time Warner Cable MSG Network, Fox Sports NY Pricing dispute flagged in newspaper ads; Cablevision-owned clubs could be blacked-out in Manhattan.
EchoStar Turner Parties remain far apart on contract affecting seven networks, including Cartoon, CNN and Turner Classic Movies.
EchoStar MTVN Parties appear to be moving toward a renewal for a number of services.

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