Last week, as retransmission-consent deals expired, a few
TV stations were expected to lose cable carriage while broadcasters and operators tangled
over the terms of their new agreements.
In many of the disputes, broadcasters -- including Fox
Television Stations, ABC Inc. and Hearst-Argyle Television Inc. -- were looking to use
their retransmission-consent leverage to angle for distribution of cable services they
fully or partially own. They were trying to use their clout to win carriage for networks
such as Lifetime Movie Network, SoapNet, Fox Sports World and FXM: Movies from Fox.
In fact, Hearst-Argyle was also reportedly looking to
extract license-fee increases and contract extensions for Lifetime Television in exchange
for retransmission-consent renewals.
In response to those demands, cable operators -- from small
MSOs to giants such as Time Warner Cable and Cox Communications Inc. -- were balking,
claiming that broadcasters shouldn't dictate what networks they carry.
So at press time last Thursday, there were several
standoffs pending -- situations where retransmission-consent deals were to expire Dec. 31,
and where it seemly likely that TV stations would pull their signals and be dropped from
cable as of Saturday, Jan. 1.
Of the ongoing retransmission-consent disputes, one of the
most contentious involves News Corp.'s Fox Television and Cox. They were at odds in a
battle that looked like it was heading toward Fox owned-and-operated TV stations going
black on cable in four markets, involving roughly 400,000 subscribers in total.
Cox said it was refusing to give in to Fox's demand
that the MSO roll out Fox Sports World and FXM on digital nationally, characterizing it as
Cox was also at an impasse with a Fox affiliate in Hampton
Roads, Va. The station, WVBT-TV, was looking for a lower dial slot in exchange for
retransmission consent. At press time, it looked like WVBT-TV was going to pull its signal
from cable in the Norfolk, Va., area, which would affect about 410,000 subscribers.
But in most cases, broadcasters had given MSOs short
extensions of expiring retransmission-consent deals so negotiations could continue on
renewals past Jan. 1. And 11th-hour resolutions between broadcasters and cable
operators were expected to -- and did -- take place last week.
For example, CBS Corp. affiliate WBNS-TV and Time Warner
Cable in Columbus, Ohio, reached a settlement of their retransmission-consent dispute.
Without that last-minute deal, WBNS would have pulled its signal from the cable
system's lineup effective Jan. 1, meaning that 310,000 subscribers would have lost
their CBS network fare on cable.
WBNS' parent, Dispatch Broadcast Group, had been
withholding retransmission consent, asking Time Warner to carry its regional news channel,
Ohio News Network. The situation in Columbus seemed so dire that Time Warner had started
to send out antennas -- "Tune to 10" kits -- to its subscribers so that they
could continue to receive and watch WBNS, which is on Channel 10.
During this round of retransmission-consent negotiations,
Hearst-Argyle, which owns some ABC-affiliate TV stations, came to cable operators seeking
contract extensions and hefty license-fee increases for Lifetime, according to cable
Hearst-Arygle was also asking operators to carry
Lifetime's all-movie spinoff, LMN, as part of retransmission-consent deals. Hearst
Corp. owns 50 percent of Lifetime. The Walt Disney Co., parent of ABC, owns the other
Cable operators were told that Lifetime is handling
retransmission-consent talks for Hearst-Argyle. Hearst-Argyle officials couldn't be
reached for comment, so it was unclear if Lifetime was negotiating just for
Hearst-Argyle's ABC affiliates, or for all of its stations.
A Lifetime spokesman confirmed that Lifetime is
representing Hearst-Argyle in retransmission-consent talks, but declined to comment on
Hearst-Argyle's demands for Lifetime -- which has a
relatively low rate card and faces competition from Oxygen this year -- were not going
over well with Time Warner.
"They are withholding retransmission consent unless
they get 300 percent increases for the fees to carry Lifetime," Time Warner spokesman
Mike Luftman said. "We said no. It's not something we can live with. We have to
keep our program-cost increases to a minimum. We need to hold the line. If they are
willing to jump off a cliff [and pull their signal], they can."
Last week, Hearst-Argyle gave Time Warner a 20-day
extension of retransmission consent for its stations so talks could continue, according to
Time Warner has cable systems in several markets where
Hearst-Argyle owns TV stations, including Cincinnati; Milwaukee; Albany, N.Y.; Honolulu;
Green Bay, Wis.; Greensboro, N.C.; Kansas City, Mo.; Keene, N.H; and Clarksburg, W. Va.
Matt Polka, president of the American Cable Association,
which represents small, independent cable operators, said a number of his members told him
Hearst-Argyle is looking for contract extensions for Lifetime and carriage for LMN in
exchange for retransmission consent for its TV stations.
According to Polka, "That has met with significant
resistance from our members," as has Disney's attempt to link retransmission
consent for ABC-owned stations to carriage of SoapNet, the 24-hour soap-opera channel that
debuts Jan. 24.
"Forcing a channel down the throat of an operator just
doesn't work," Polka said. "They're just not willing to put a channel
on to get retransmission consent at the point of a gun. [Programmers are] going to have to
Disney/ABC Cable Networks officials have said that carriage
for SoapNet is just one factor it was talking with operators about as part of
retransmission consent for ABC stations, and it was not a mandatory part of the deal.
In New York and reportedly in other markets, Time Warner is
running a crawl warning subscribers that the system may have to stop carrying the local
ABC-owned station after Jan. 15. Disney had granted Time Warner a retransmission-consent
extension until then.
Luftman said the negotiations with Disney were going well,
and he wasn't expecting the worst, although the MSO had to broadcast the 30-day
warning to its subscribers in case an agreement isn't reached for the ABC-owned
A Disney/ABC Cable spokeswoman also indicated that the
talks with Time Warner were going well.
Neither side would talk about what was hanging up their
retransmission-consent talks. But the suspicion is that the holdup relates to carriage of
While Time Warner announced last week that it had closed a
long-term retransmission-consent agreement with Fox for its 22 owned-and-operated TV
stations, Cox is in a heated battle with the broadcaster.
Cox said it was unwilling to grant Fox's demand that
the operator carry FXM and Fox World Sports on digital across the country in order to get
retransmission consent for the Fox-owned stations. A Cox spokeswoman said the MSO wants
its systems to be able to tailor digital lineups to local tastes.
The Cox markets and Fox stations that are affected by the
dispute are: Fairfax County, Va., with 260,000 homes and WTTG; Cleveland, with 70,000
homes and WJW; Houston, with roughly 30,000 subscribers and KRIV; and Austin, Texas, with
about 20,000 homes and KTBC.
Cox had asked for a 30-day extension, or "cooling-off
period," from Fox, but the MSO said it was denied one. So officials from both
companies were predicting that the stations' signals in those four markets would wind
up being pulled come Jan. 1.
On the Web site of Cox's Cleveland system, the
operator printed an open letter to WJW that read, "Your company, Fox, refuses to
permit Cox to continue carrying its signal past Dec. 31, 1999, unless all Cox systems in
the United States agree to carry two more Fox cable channels. We can't submit to this
type of extortion."
Lindsay Gardner, executive vice president of affiliate
sales and distribution for Fox Channels Group, pointed out that Fox had come to peaceful
retransmission-consent renewals with a number of major MSOs -- not only Time Warner, but
also Comcast Corp. and others. Time Warner has agreed to give FXM and Fox Sports World
Gardner added that Cox was unwilling to place a value on
carrying the Fox stations. "This has more to do with Cox trying to make an example of
someone than with the appeal of our channels," he said. "Our television-station
viewers and Cox's paying subscribers will bear the brunt of that."
Cox subscribers in Austin may be particularly upset since
Fox is telecasting the Cotton Bowl, which pits the University of Texas against the
University of Arkansas, on New Year's Day.
After an acrimonious few past months, there was an amicable
retransmission-consent resolution in Columbus.
In a joint statement issued last Wednesday, WBNS and Time
Warner said the broadcaster had agreed to give the cable operator retransmission consent
under existing terms for two years, from Jan. 1 through Dec. 31, 2001.
In addition, both parties said they had agreed to continue
their talks about the ONN dispute after Jan. 1. "Each party will negotiate for a
period of 120 days commencing Jan. 1, 2000, regarding potential carriage of ONN on Time
Warner systems," according to the statement.
Time Warner had recently gone to court, asking a judge to
make a summary judgment on the issue. But in late December, a judge refused to issue a
ruling, setting the case for trial this year. Both sides have now dismissed their claims
in that litigation.