CBS, Time Warner Cable Extend Talks Until MidnightUpdated: Parties face blackout for programmer's stations, cable networks 7/28/2013 05:13:00 PM Eastern
UPDATED: 11:02 p.m. ET
CBS and Time Warner Cable have extended their negotiations until a new witching hour: midnight on the East Coast.
With negotiations continuing, the carriage contract between CBS and Time Warner Cable has been extended for the fifth time Monday, this time until midnight (ET), perhaps signaling that the parties are nearing a resolution of their retransmission-consent dispute.
Battling over price, the sides faced an earlier 5 p.m. deadline Monday for retransmission-consent of CBS-owned stations in the MSO's footprint, as well as carriage of cable networks Showtime, CBS Sports Network and Smithsonian Channel on all of the distributor's systems nationwide.
The contract that was signed in 2009 -- covering retransmission-consent of 13 CBS-owned stations in eight markets within TWC’s footprint, including WCBS-TV and WLNY-TV in New York, KCBS-TV and KCAL-TV in Los Angeles and KTVT-TV and KTXA-TV in Dallas-Ft. Worth -- was orginally set to expire on June 30, but was extended late last month until July 24. At that juncture, the sides agreed to another interim extension through Monday's 5 p.m. cutoff, before the additional three-hour negotiating window was opened, and then amended again until 9 p.m.
The other affected stations are: Boston (WBZ, WSBK), Pittsburgh (KDKA, WPCW-CW), Denver (KCNC), Detroit (WKBD-CW) and Chicago (WBBM).
On Monday night just minutes before the 8 p.m. deadline, Time Warner Cable said it had agreed to a new extension until 9 p.m., while the broadcaster noted that “CBS and Time Warner Cable have extended their current deal again into the evening while the companies continue to negotiate.”
If Monday's extensions prove not to be the charm, some 3 million Time Warner Cable subscribers may miss out on CBS network and local station far. Moreover, all of the No. 2 MSO's customers could lose the cable programming, including premium service Showtime, which is televising the final season of its top series, Dexter, as well as its new original hit skein, Ray Donovan.
Negotiations between the parties had continued quietly and out of the public’s view until July 18. But at that point, Time Warner Cable and CBS began trading barbs in competing ad campaigns, with TWC claiming the broadcaster is asking for a 600% premium to what other CBS broadcast stations charge it on average. CBS counters that TWC is refusing to negotiate the same sort of deal that other distributors have reached with the network.
Investment firm RBC Capital estimates that CBS is now receiving between 75 cents and a $1 per sub per month from Time Warner Cable. Analyst Marci Ryvicker of Wells Fargo said the expired CBS-TWC agreement is considered a sweetheart deal. She says CBS is pressing for a deal that will eventually ramp up to $2 per sub.
Earlier on Monday at the Television Critics Association conference in Beverly Hills, Calif., CBS CEO Les Moonves was was asked about the situation with Time Warner Cable. "I really don't want to negotiate in public. That's probably not the best way to do it," he said, noting he had been on the phone negotiating as recently as 15 minutes prior. "It's a very difficult negotiation... I hope we don't go dark. Conversations are happening between a lot of people today."
CBS, having long been the most-watched broadcast network, has chosen an aggressive course when it comes to retrans, recording a 62% rise in payments from cable, satellite and telco TV providers in the first quarter of 2013. The company is said to seeking up to $500 million in total retrans fees in 2013. That total could grow to $1 billion by 2016, four times the $250 million it reaped in 2012.
TWC has also been talking about permanently removing CBS from its prized Channel 2 positions in New York and Los Angeles if the stations go dark, noting it has drawn in those spots from other programmers. For its part, CBS said in an earlier statement that it "obviously won’t be making any deals where we are required to change our channel position."