Analyst To Time Warner Cable: Strike Deal With LIN TV

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Time Warner Cable “needs” to reach a retransmission-consent deal with LIN TV, which is threatening to pull its signals from the cable operator at the end of the day Thursday, according to Pali Research analyst Rich Greenfield.

In a report Wednesday, Greenfield pointed out that 20% of Time Warner’s subscribers, or 2.7 million customers, are in markets with LIN TV stations.

“We believe TWC needs to make deal with LIN (can you imagine Green Bay, Wis., without access to Packer games on LIN’s Fox affiliate, including this Sunday’s Packers/Falcons game),” Greenfield wrote.

Time Warner said Wednesday that it is trying to negotiate a deal with LIN TV in good faith, and that it should not have to pay for broadcast programming that’s available gratis over-the-air.

“We’re trying to manage costs so our customers aren’t forced to pay for programming that is available for free with an antenna,” said Robyn Watson, Time Warner Cable’s director of public relations. “That’s the bottom line. And LIN TV is simply trying to make more money.”

The broadcaster’s retransmission-consent deal with Time Warner expires Oct. 2, affecting 15 stations carried by the cable operator  in Austin, Texas; Buffalo, N.Y.; Columbus, Ohio; Dayton, Ohio; Fort Wayne, Ind.; Green Bay, Wis.; Indianapolis; Mobile, Ala.; Springfield, Mass.; Terre Haute, Ind. and Toledo, Ohio.

In his report, Greenfield noted that one of LIN’s stations, KXAN-TV in Austin, Texas, has posted a question-and-answer section about its dispute with Time Warner, and its position on retransmission-consent compensation.

On the site, the station says, “Here is the basic analogy: If you were to get a drink of water at a public drinking fountain, it is free, but once the water is placed in a package, it is no longer free. The same holds true for local television programming delivered through a subscription-based provider.”

Greenfield pointed out that Time Warner is set to enter first-time retransmission-consent negotiations with Univision, and will soon be entering negotiations with Fox Cable, including its regional sports networks; NBC Universal, both its cable and broadcast outlets; and Discovery Communications.

“Assuming LIN only wants the $0.01/sub/day that it mentions in some of its press material, that equates to about $10 million of annual cost to TWC,” Greenfield wrote. “We presume the larger issue for TWC is setting a precedent as it heads into larger retrans battles such as Univision later this year.”

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