Bewkes: Turner Nets "Undervalued"

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Time Warner Inc. chairman and CEO Jeff Bewkes told analysts Wednesday that the media giant will be aggressive in extracting fair value for its Turner networks during carriage negotiations in the next few years, adding that the channels are "substantially undervalued."
On a conference call with analysts to discuss first quarter results, Bewkes noted that while there are no big deals coming due this year, all of Turner's networks are due for carriage renewals by the end of 2016.
"We believe strongly that many of our brands are substantially undervalued today," Bewkes said. "In this next round of affiliate negotiations, we will be very aggressive and correct that. As we look out to 2014 and beyond, we expect Turner's domestic affiliate fees to grow at a considerably higher rate than they have during the past several years."
Turner Network Television and TBS are among the priciest general entertainment cable networks, attracting estimated average affiliate fees of about $1.21 and 59 cents per subscriber per month, according to SNL Kagan. Other cable channels in the Turner stable - including CNN, truTV, Cartoon Network attract fees ranging from 57 cents to 11 cents per subscriber per month.
On the conference call, Time Warner chief financial officer John Martin said that TNT, TBS and truTV have already completed several carriage deals around the time it inked its NCAA Men's Basketball Tournament agreement with CBS and that the networks don't have any major distribution deals up for renewal this year. CNN and Cartoon Network, he said have some deals expiring in 2013, with the bulk of the deals coming due in 2014 through 2016.
But Martin said that he was encouraged by increases the Turner Networks received and was confident that other networks could attract similar fee increases.
"We are very, very confident in the long-term affiliate fee outlook," Martin said on the call."The pricing increases we have been able to garner in recent deals have only underscored that confidence. We have every intention to try to get our networks closer to where we believe fair value is going forward."