New York -- Charter Communications Inc. president Carl Vogel said that more than one-half of its programming contracts are set to expire in the next 12 months, adding that it presents an opportunity to further reduce costs.
Vogel, speaking at the UBS Warburg LLC Media Week conference here, said that between 60%-65% of Charter’s contractual base will expire between the end of 2003 and the end of 2004, including contracts for sports networks like Fox Sports Net and ESPN.
Vogel said during the conference that the expirations present Charter with the opportunity to negotiate better deals or to move some networks on to tiers.
"Our strategy is pretty simple," he added. "We need to improve programming costs. There are two ways to do that. One is to negotiate better rates, and two is to migrate certain services to digital and offer customers a choice."
He continued, "I’m not going to put a stake in the ground and say, ‘I’m going to reduce programming costs by X,’ but it’s a high priority for the company. We’re going to work hard to beat the cost increases we’ve put into our plans."
Vogel said his main weapon in the negotiations is senior vice president of programming Sue Hamilton, who had held a similar position with AT&T Broadband before joining Charter in March.
"She has great institutional knowledge of what deals are out there," Vogel said. "I know her strategy will be to negotiate rate increases we think are fair, while providing a competitive channel lineup for our customers and, where we can, moving services that may have been on the analog tier for a while up into the digital tier to help drive digital penetration."