Associations React After CBS, Time Warner Cable Reach Deal

The TV viewers caught in the middle of the fight between the nation’s most popular broadcast network and its second-largest cable provider can relax now. But associations representing those industries have very different takes on the outcome.

It was a long month, but fortunately for football fans, it’s finally over.

After a protracted battle over cable retransmission fees, CBS and Time Warner Cable were able to strike a deal on Monday night, bringing the broadcast network and the other programming it owns back to millions of cable subscribers, many of them in large cities. That means all of the NFL fans sweating out the start of the season won’t face a continued blackout.

If CBS can leave millions of pay-TV viewers in the dark for 32 days, no one can say with a straight face that the marketplace is working well for consumers.

Associations on either side have differing takes on the outcome. More details:

The agreement: While specific details of the agreement setting the amount of money that Time Warner Cable pays for the rights to carry the CBS-owned TV stations have not been released to the public, the cable provider says that it was able to talk CBS down. Regarding whether TWC paid 600 percent more than other providers for CBS content, the company said this in a FAQ: “We won’t discuss specific deal terms. But no, we reached a deal that is significantly better than the one first proposed by CBS.” The network, which hopes to increase its income from cable retransmission deals to more than $1 billion by 2017, seemed pleased with the agreement. “We are receiving fair compensation for CBS content and we also have the ability to monetize our content going forward on all the new, developing platforms that are right now transforming the way people watch television,” CEO Les Moonves said in a statement.

Cable providers say change is needed: The American Cable Association, which represents independent cable operators, argued in a statement that the retransmission fight shows the need for increased scrutiny of the rules regulating industry conflicts. “The point that no one should miss is that CBS’ massive blackout of Time Warner Cable and Bright House Networks showed that the retransmission consent market is broken, and outdated rules governing these negotiations need to be updated to reflect current market conditions,” ACA President and CEO Matthew Polka said. “If CBS can leave millions of pay-TV viewers in the dark for 32 days, no one can say with a straight face that the marketplace is working well for consumers.”

Is Time Warner Cable the exception? That’s what the National Association of Broadcasters suggests. In a comment to Associations Now, NAB Executive Vice President of Communications Dennis Wharton described the situation between CBS and Time Warner as an unusual blowup over something that’s relatively routine. “Despite the recent impasse between Time Warner Cable and CBS Corp., the reality is that television station groups routinely reach successful carriage agreements with pay-TV providers,” Wharton told AN. “The agreements are a true reflection of the free-market negotiation process. The vast majority—in fact, more than 99 percent of these agreements—are successfully negotiated out of public view with little fanfare, because there is tremendous incentive for both the local station and the pay-TV provider to reach an amicable arrangement.” To underscore this point, NAB pointed out a similar deal reached this weekend between CableOne and KTIV, based in Sioux City, Iowa, a local NBC and CW affiliate.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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