CBS Signs Nine Retrans Deals

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CBS said it reached comprehensive retransmission-consent agreements with nine separate cable operators, including several top-25 MSOs, covering more than 1 million subscribers nationally.

All of the agreements include analog, digital, multicast and HD rights to programming on CBS owned-and-operated television stations.

CBS spokesman Dana McClintock declined to name the operators the company reached agreements with, citing "confidentiality." Terms of the agreements were not disclosed, and when asked if CBS was receiving cash, McClintock would only say, “We’re receiving value.”

But an official familiar with the situation said CBS was receiving cash for carriage, much as it did nearly one year ago in a retransmission-consent pact with Verizon Communications. CBS garnered somewhere in the neighborhood of monthly 50-cent-per-subscriber license fees from the telco.

In a report subtitled “CBS: [C]able [B]rings [S]ub-Fees,” Bear Stearns estimated that the CBS deal represents $6 million in revenue.

“We still believe CBS can capture $155 million-$175 million in retrans fees, making CBS one of the broadcasting industry’s greatest retrans beneficiaries,” Bear Stearns analyst Victor Miller wrote Thursday. “But most retrans dollars are not likely to be seen until 2009-10.”

CBS CEO Leslie Moonves has been a vocal advocate of broadcasters collecting cash from cable companies in exchange for carriage of their TV signals.

“We’re pleased to have forged these long-term, forward-looking partnerships with so many cable operators,” Moonves said in a prepared statement. “Clearly, there is a new paradigm in the marketplace -- one that recognizes the value of the content that we bring to our various audiences. This is a trend that bodes well for us going forward as future retransmission deals are negotiated.”

Most of CBS’ agreements don’t expire until 2009.

The Big Three broadcaster’s news Thursday came just weeks after Sinclair Broadcast Group, after a bitter fight, closed a retransmission-consent deal in which Mediacom Communications will reportedly pay cash license fees for carrying TV stations.

“All of these companies are hiding behind the nondisclosure stuff, but they are asking for cash,” JP Morgan analyst John Blackledge said. “This is how they translate it: Sinclair will say, ‘We’re asking for cash, so you can figure that we got some cash.’ CBS, same thing, they can’t really say much, but they’re asking for cash, figure they got cash. Given their scale, versus Sinclair, I would assume that they got a better per-sub, per-month number … I think CBS can extract more cash than the smaller pure-plays [broadcast companies].”

Citing CBS’ Verizon deal, Blackledge said he assumed that the broadcaster is getting license fees “in the same ballpark” from the nine cable companies. But he added that while he thinks it will be predominantly be cash, he suspects part of it will be barter ad time.

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