Analyst: TWC Could Face Retrans Fight


Pali Research media analyst Richard Greenfield reiterated his “sell” rating on Time Warner Cable shares, warning that the second-largest cable operator in the country faces a looming retransmission consent battle with Spanish-language broadcaster Univision.

In a research note Thursday, Greenfield wrote that Time Warner Cable is particularly vulnerable because it is the dominant cable provider in two of the largest Hispanic markets in the country—New York and Los Angeles.

Univision, which was bought by a consortium of investors including Haim Saban last year, has hinted for months that it plans to start charging operators for retransmission consent.

This is the second time in about three weeks that Greenfield has issued notes on the impending Univision/TWC retransmission battle. His last was on July 25.

In his Thursday note, Greenfield wrote that although TWC chief financial officer Rob Marcus seemed optimistic that it could reach a retrans agreement with Univision on its second quarter conference call on Aug. 6, the analyst believes Univision could be “problematic” for the cable operator.

Greenfield noted that Univision reaches about three-quarters across its platforms—including its broadcast network, television stations and cable channel Galavision—of the viewership of satellite and cable operator Spanish-language programming packages.

“Given the weaker than expected performance of the TV station business in the U.S., we believe Univision must push as hard as possible to attain meaningful sub fees from cable and satellite operators,” Greenfield wrote. “Univision needs the retrans dollars and TWC cannot afford to further upset subscribers in key markets such as Los Angeles, which are just beginning to recover after the Adelphia integration was bungled by management.”

TWC shares were down 4 cents each to $27.51 per share in early trading Thursday.