Even though Time Warner Cable and LIN TV finally reached a new retransmission-consent deal Wednesday that brought an end to a month-long station blackout, the $64,000 question remains: Is the cable operator paying cash license fees for the broadcaster’s TV stations? And if so, how much?
“That’s obviously the big question,” said Pali Research analyst Rich Greenfield.
Representatives for Time Warner Cable, the nation’s second largest cable company, and LIN TV declined to comment Wednesday on the financial terms of their new contract. There’s a confidentially clause in the pact.
But LIN TV will likely be asked about its new contract with Time Warner Cable when it holds its third-quarter earnings call with Wall Street analysts Thursday morning. The dispute was also settled before the start of the November sweeps.
LIN TV had been seeking for a 30-cent monthly, per-subscriber license fee for its stations, which went off Time Warner’s lineups Oct. 3, affecting 1.5 million cable subscribers. Those signals were restored to Time Warner Wednesday.
Industry speculation was that Time Warner was likely paying a license fee to LIN TV, but not the 30 cents that the broadcaster had sought.
According to LIN TV, the new deal covers analog and digital signals for 17 TV stations: the 15 carried by Time Warner Cable and Bright House Networks, whose old deals expired Oct. 2 and were pulled; and two stations in Norfolk, Va., whose deals are due to expire at the end of the year.
When Time Warner’s old retransmission-consent deal with LIN TV expired, the broadcaster pulled 15 stations off Time Warner Cable and Bright House Networks systems 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.
The dispute involved three LIN TV stations that Bright House carries in Indianapolis and two it carries in Mobile.
“We are pleased to come to an agreement that will return programming to our customers,” Melinda Witmer, Time Warner’s chief programming officer, said in a prepared statement. “We thank our customers for their continued patience and support as we worked to resolve this issue.”
A Bright House spokeswoman said, “Obviously, we’re glad that it’s finished and they’re (the stations) back on.”
Throughout the dispute, Time Warner Cable had balked at the notion of paying what LIN TV characterized as a penny a day in license fees for the broadcaster’s stations.
“We are pleased to have reached a fair market agreement with Time Warner Cable,” LIN TV president and CEO Vincent Sadusky said in the broadcaster’s press release on the new deal. “This agreement, which represents a mutually acceptable economic agreement between the parties, is further indication of the value of our television stations. We thank our viewers and our advertisers for their tremendous support throughout these negotiations.”
In a report earlier this month, Greenfield estimated that if LIN TV got the license fee it was initially seeking, the 30 cents a month per subscriber, it would cost Time Warner Cable $10 million annually.
Greenfield had also noted that Time Warner Cable was about to enter into first-time retransmission-consent talks with Univision, which has said it wants $1 license fees for its stations.
The analyst then added that the cable operator would soon be entering carriage negotiations with Fox Cable Networks, including its regional sports networks; NBC Universal, for both its cable and broadcast outlets; and Discovery Communications.