The group owner says talks have broken down after Time Warner Cable turned down a retrans fee of 10 cents per sub and didn't make a counter offer. TWC says that's not true and that it remains "open and willing to negotiate a reasonable agreement for our customers and have no intention of declaring negotiations to be at an end even in the event that Sinclair decides to pull their signals from Time Warner Cable on Dec. 31."
RETRANS WARS–UPDATED
Sinclair To Pull Stations From TWC Systems
Sinclair Broadcast Group announced today that negotiations with Time Warner Cable have come to an end “as a result of Time Warner Cable’s refusal to engage in further negotiations.”
Sinclair’s most recent financial offer — a monthly per-station increase that averaged 10 cents per subscriber — was rejected by TWC, Sinclair said, adding that TWC “refused to provide a financial counter-proposal, effectively ending negotiations.” As a result, Sinclair television stations will no longer be carried on Time Warner Cable systems after midnight on Dec. 31.
Sinclair said its most recent offer would have guaranteed that the price being paid by Time Warner Cable “would be equal to or less than the price agreed to by every other major cable and satellite provider with which Sinclair has completed a deal during the past two years.”
This “most-favored nations” protection included not only Time Warner’s primary competitors, DirecTV and Dish Network, but also the agreement reached with Charter earlier this year and the agreement reached with Mediacom just last week. Sinclair said the pricing proposed by Sinclair is also less than what published reports indicate the cable industry pays for less popular programming streams, such as ESPN, TNT, the Disney Channel, Fox News and others.
Sinclair said it has also offered to match the pricing pursuant to which Time Warner Cable claims it will be able to continue to carry Fox network programming, a proposal that Sinclair said Time Warner “has also rejected without even making a counter-proposal. Time Warner has also rejected Sinclair’s suggestion to resolve the dispute using a fair and reasonable binding arbitration process.”
The expiring agreement with Time Warner Cable covers 33 television stations received by more than 8.5 million of what Time Warner Cable refers to as primary service units.
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“We simply do not understand why Time Warner insists on being treated better than its competition,” said Barry Faber, Sinclair’s EVP-general counsel, “rather than accepting our equitable proposal to provide them equivalent or better pricing than is paid by their competition. It is particularly troubling that Time Warner would deprive its subscribers of the extremely popular programming broadcast by our television stations when the monthly per station increase we are seeking amounts to just 10 cents per subscriber, an increase made necessary by rapidly increasing programming costs at our stations. With such a small increase we suspect that most of our loyal viewers would prefer that Time Warner Cable, which recently announced a fee increase of $3 per month in at least one market, stop acting on its threat to ‘Get Tough’ and we hope that these viewers will let Time Warner Cable know this by switching to alternative video providers, many of which charge less than Time Warner Cable and none of which are currently at risk of losing access to any of the stations involved.”
Time Warner Cable, in a statement, dened Sinclair’s claims, saying:
“Sinclair’s statement is false. Time Warner Cable has at no time told Sinclair that we were terminating negotiations. To the contrary, it is Sinclair who has repeatedly over the last three months declared discussions to be at an end and this is more of the same from Sinclair. Time Warner Cable has presented Sinclair with at least three possible solutions, including arbitration for Sinclair’s Big 4 stations. We remain open and willing to negotiate a reasonable agreement for our customers and have no intention of declaring negotiations to be at an end even in the event that Sinclair decides to pull their signals from Time Warner Cable on Dec. 31.”
Comments (18)
kendra campbell says:
December 28, 2010 at 1:34 pm
Congratulations to TWC for saying no. They should never have paid a penny to local stations that are free and over-the-air. Next step is freezing all cable channel payments for the next ten years. The third step is for the FCC and Congress to mandate a la carte programming. Subsribers have had enough of this nonsense.
Kathryn Miller says:
December 28, 2010 at 2:44 pm
huh? So, you somehow believe that cable should stop transmitting over the air signals? What planet do you live on? Should my local supermarket stop selling milk because it’s more expensive than gas in my car (per gallon?) I guess that depends on what business the supermarket thinks it is in.
kendra campbell says:
December 28, 2010 at 3:10 pm
Huh? I do not believe cable should stop transmitting over the air signals. Must carry rules are just fine. Cable systems should never have agreed to pay for local stations. I’m no fan of TWC or any other cable company, but the system is broken and the subscribers are getting the shaft.
Kathryn Miller says:
December 28, 2010 at 4:59 pm
pshaw. the only thing broken is that you think that cable companies shouldn’t be subject to the commercial marketplace.
jeff lee says:
December 30, 2010 at 8:07 pm
jdshaw……..
So you wouldn’t want a piece of the pie if you spent money to produce a product that you gave away for free and someone else was reselling it for a profit? Also, if the station gets pulled from their system how much of a drop will you see in your bill? Start asking for a credit!
Kate Vossen says:
December 28, 2010 at 2:26 pm
Time Warner is a bunch of greedy creeps who are only interested in destroying over air local television so they can fill the news and advertising void.
The MSO’s in general are pure monopolists who could care less about paying big money for cable channels viewed far less than the big 4 networks. I totally agree a la carte should be the mandate with all free channels distributed fully. It is time to separate the delivery wires from the video services so real competition can occur. They successfully broke up the phone monopoly so why not video services? The available channels could be fed in a common feed -saving bandwidth. The set top box could be the key to the service itself where insertion could take place defining the provider, commercials, and services so a customer can tailor the service to the customers needs.We can easily do this just like with phone,gas,and electric for example.
Don Richards says:
December 28, 2010 at 2:43 pm
A-la-carte sounds like a great concept…but it seems to overlook one basic fact-of-life. What would the cable companies charge for the “hook-up” each month? Would they charge $50 per month just for the wire coming to your house (they have to cover their capital and operating costs)? Would you then order channels on top of that? Would ESPN become a $10-per-month charge? As much as I like the sound of a-la-carte, I don’t know that it would insure that the consumer would actually save money. And what happens when the lowly-viewed cable networks that are not chosen by consumers, go bankrupt because they don’t have enough viewers to sell enough advertising. While broadcasters would be jumping up-and-down celebrating, I think consumer groups and Congress would be less inclined to let those channels disappear. I don’t see a-la-carte pricing coming to the cable industry any time soon. I think we’re better off pushing to allow our broadcast signals to be streamed online (using geo-fencing technology to limit our distribution to viewers in our DMA’s) so we can encourage our viewers to plug into the internet and watch our stations…free.
Peter Grewar says:
December 28, 2010 at 8:33 pm
That the business model is undeveloped is certainly not a compelling argument against a la carte. In an a la carte world, I suspect that cable and satellite companies would experiment until they found the pricing models (base charge, minimum number of services required, or whatever) that worked for the largest number of customers while still generating a profit for the service providers. I don’t see a problem with letting that play out and develop.
As for the idea that “lowly-viewed cable networks” would bite the dust…well, so what? If significant numbers of viewers don’t care enough about those channels to either watch or subscribe to them, why would the absence of those channels be a loss? I don’t buy the argument that a la carte would automatically kill minority interest channels — instead, I think that those minority interest channels would have to find a programming formula that generates enough viewer loyalty to get members of their target audience to shell out for those channels. Who knows…the result might actually be a major improvement over the likes of what passes for minority programming today. Again, without trying it, we don’t know…
mike tomasino says:
December 28, 2010 at 3:27 pm
Hybrid systems like Sezmi that combines free OTA broadcasts with internet delivered content are on their way. Ultimately a-la-carte via the net is inevitable. Cable will have to compete with telcos and other ISPs for internet business. Subscribers will pay content providers directly or through a billing service. No more paying for junk channels no one watches anyway. No more being forced to pay for ESPN when your not a sports fan. Sounds great to me, the sooner the better.
Teri Green says:
December 28, 2010 at 4:02 pm
Here we go again. I understand the frustration, but cable is not a free market. Free market only works where it is truly a free market. That means that anyone with enough capital can start a competing business. Cable in most places is a monopoly. No dishes and VIOS and U-Verse are not cable, so to say you have them as an alternative is not analogus. Dish and Direct TV are two options of one kind. Direct TV and TWC are two seperate delivery systems. TV stations already get money from cable by allowing the stations to reach more viewers. The more viewers the more the station can bill for the ads. So why add the fees. To be fair, the cable companies should find the proportion of viewers who get the TV station on cable that would be unable to see it over the air. Then they should subtract out a proportional ad rate from any fee the OTA TV station wants to charge. This is the only real fair way to balance it out
Curt Molander says:
December 28, 2010 at 4:44 pm
Fair? Fair? If TWC doesn’t want to buy it, they don’t have to. That’s fair. If Sinclair does not want to sell it, they don’t have to either. That’s fair. The world will not come to an end, I promise. If both sides truly value each other and truly want to work out a deal, they will. If they don’t, they won’t and that is perfectly fair.
Kathryn Miller says:
December 28, 2010 at 5:00 pm
agreed.
David Siegler says:
December 28, 2010 at 5:04 pm
I wonder why the Feds don’t just mandate a free over the air tier on all cable systems so that viewers don’t have to pay anything for service unless they choose some cable only or premium services. Cable neutrality!!!
mike tomasino says:
December 28, 2010 at 5:33 pm
You certainly bring up the issue that there are costs involved in cable retransmitting the broadcast signal. They certainly can’t do it for free. And as far as cable neutrality is concerned, if a station qualifies for and chooses must carry, then the cable company must carry them. That sounds pretty neutral to me. Then again if the station wants to be paid there is no reason the cable operator can’t just drop them and say too bad, so sad.
suzanne mccoy says:
December 28, 2010 at 5:36 pm
With the internet nipping at their heals cable operators better rethink their business plan. Ala carte makes sense and they should at least do a feasibility study and publish the results. Raising rates to increase your profits while not giving anything in return is what happens when the ‘free market’ isn’t in place but rather a monopoly.
Paul Bremer says:
December 28, 2010 at 6:51 pm
TWC was built on the backs of broadcasters and would love to see broadcasters go out of business. Cable made a fortune reselling broadcast signals to local viewers; using those monies to aid the creation and support of competitive cable channels and networks. They compete with broadcasters for advertising locally. Thank goodness for Apple, SONY, and all of the efforts to stream programming, avoiding cable. Sell you cable stock!
Hope Yen and Charles Babington says:
December 28, 2010 at 10:48 pm
Tom Painster makes a good point. We can’t stuff the genie back in the bottle. As both a CBS and ABC affiliate owner before selling, I remember when the NETWORKS were the ones driving the pay-for-carriage bus. Affiliates had no choice but to seek $$$ from CATV operators, as networks were chopping away at comp, a historic part of the affiliate-station model. Even today the ‘Big 3+1’ webs do pretty well in the ratings, particularly in prime. Had the FCC, stations and CATV systems left the system as it was long, long ago, i.e, must-carry for ALL stations when the system serves communities within the GRADE B contour of the station, we’d be OK today.
Such protections as network exclusivity and carriage on-channel if desired made sense as well. Today’s system of stations choosing must carry OR negotiation is about as good as its going to get, but it does lead to these end-of-the-script blackouts, which is still desirable to court or FCC mandated solutions. God Forbid, we have ENOUGH Federal Government intervention in our lives, I’m still for letting the marketplace decide.
Ed Miley says:
January 4, 2011 at 5:22 pm
All good points made by people in the industry. But put yourself in the shoes of the other side and you’ll see that there is an imbalance. I posed this question that I would like to see in a survey – “Would your station ad revenues be as strong if your station was NOT on alternate forms of signal delivery – be it Cable and or Dish?” Like it or not it doesn’t seem rational to turn away upwards of 70% of your audience overnight by pulling your signal off. If I was an Ad agency I’d be looking for deep discounts if not shopping elsewhere for my advertising airtime – last I knew clients want to be seen. You can try to unring the bell but looking purely at the economics TV Stations need cable a lot more than cable needs the local TV stations.