Moonves: Stations Could Go Dark on TWC

CBS Honcho Issues Memo to Employees: “We Don’t Take This Situation Lightly”

As the expiratoni date for its retransmission consent agreement with Time Warner Cable draws near, CBS CEO Les Moonves issued a memo to employees Tuesday stating that its stations in several key markets could go dark later this week.

CBS and Time Warner Cable have been embroiled in a war of words over the past few days, as the cable operator claims the broadcaster is demanding a rate increase that is more than 600% above what other CBS affiliates charge. CBS claims it is seeking fair compensation for its programming, which is among the highest rated on television.

“This dispute has escalated over the past few days, and there is a very real threat that Time Warner Cable is going to drop our stations in New York, Los Angeles and Dallas (and possibly Showtime) off the air Thursday morning,” Moonves wrote in the memo. “As you can imagine, we don’t take this situation lightly.” 

TWC’s retrans agreement with CBS was originally set to expire on June 30, but the broadcaster extended that deadline to July 24 at 5 p.m. The cut-off date was further extended to July 25 at 9 a.m., to comply with Federal Communications Commission rules that prohibit a station from going dark during a ratings “sweeps” period.

At risk of being pulled from the TWC lineup are about 13 CBS and CW stations in eight markets, including those in New York, Los Angeles and Dallas.

Negotiations between the parties seemed cordial in the beginning, but signs that all was not well emerged on July 18, when CBS began an ad campaign accusing TWC of threatening to drop the station. TWC issued its own ads claiming CBS was demanding a price that represented a 600% increase over the rate it is currently paying other CBS affiliates.

In Tuesday’s memo, Moonves claimed that CBS is receiving less for retrans compensation than many other networks with much lower ratings – he added that CBS is not even among the top 10 recipients of the programming fees paid  out by TWC.

“Clearly something is out of whack,” Moonves wrote.

Moonves pointed to TWC chairman and CEO Glenn Britt’s own words at an industry conference last year, when he said the MSO would look at every carriage agreement carefully and weed out channels that weren’t carrying their own weight.

“We obviously agree with Mr. Britt,” Moonves wrote. “Because at CBS we carry our own weight.”

Moonves added that CBS has offered TWC a short-term extension as they continue to try to work out a deal, but the MSO has refused.

Time Warner Cable spokeswoman Maureen Huff said that the company has not refused an extension.

“We said we’d be happy to consider an extension offer, but right now we want to continue to negotiate to try to reach an agreement before the expiration,” Huff wrote in an e-mail message.

TWC also took exception to Moonves’ characterization that other lower rated networks receive higher fees than the No. 1 broadcast network.

“Every decision we make on programming is based on a variety of factors, including unique content, cost and popularity,” Huff wrote. “We are constantly engaged in making our lineup the best value we can for our customers.  We are willing to pay for CBS, and we have offered them significant fees. But their current demands don’t represent a good value for our customers.  Nevertheless, we’ll continue to negotiate, and hope to reach an agreement before the expiration.”