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Emmis, DirecTV hit impasse in Portland

Chairman Smulyan refuses to just 'give' his signal away 12/10/2000 07:00:00 PM Eastern

Still angered by broadcast TV's "giveaway" of their channels to cable in the 1970s, Emmis Communications Chairman Jeffrey H. Smulyan says he's not going to take it anymore. This time, he wants to be paid for his local TV stations' products.

Smulyan is the first broadcaster to take a public stand against what he labels "outrageous" offers from satellite-TV companies for local TV signals. In his case, Hughes Electronics' DirecTV has offered pennies per subscriber to carry Emmis' KOIN(TV ) Portland, Ore. CBS affiliate KOIN has not been available to DirecTV customers since the satellite-delivered service launched in the market on Aug. 25.

Although some KOIN wannabe viewers have complained, Smulyan says his strategy is "sit there and wait. We're just not going to give our signal away."

DirecTV charges $5.99 per month per subscriber for local stations-meanwhile offering the four local stations a total of 40 cents per subscriber. That's just 10 cents per viewer, KOIN General Manager Peter Maroney said in the Nov. 24 edition of the Portland Business Journal
. Maroney did not return a telephone call last week seeking comment.

"Whether they're offering 10 cents a month, five cents or 12 cents, they're charging $1.50 per subscriber for my
signal," Smulyan says of DirecTV. And there's no way it costs DirecTV that much to provide the signal, he says.

Nonsense, DirecTV spokesman Robert Mercer responds. "We're using extremely
valuable capacity ... and it is
expensive" to carry local TV stations, he says. While Mercer declines to disclose any financial details, he says DirecTV made "a very fair offer [to Emmis]. It's the same offer that we've made to other stations in other markets" that were accepted.

DirecTV currently offers all Top Four network affiliates in almost all its 38 markets.

DirecTV competitor EchoStar Communications has retrans agreements with all top- four affiliates in the 34 markets where it currently offers its Dish Network satellite service, including Portland, EchoStar spokesman Mark Lupkin says. He cannot disclose details of any agreements, but "they are on a case-by-case basis, and they are negotiable."

Disagreements during retrans negotiations are not unusual. Most recently, on Sept. 29, Hearst-Argyle Television and EchoStar announced retrans agreements for NBC affiliates WLWT(TV) Cincinnati and WYFF(TV) Greenville, S.C. (Dish launched its service on other stations in those cities on Sept. 5.)

Not all broadcasters are as unhappy as Smulyan. One executive says his group, which owns mostly top-four affiliates, is "happy with the deals that we got" with satellite-TV providers.

Tongue-in-cheek-or maybe not-Smulyan says he is willing to break the impasse between KOIN and DirecTV: "I will pay all their costs and double it if they give me all the revenue." That's the same stand he will take should either DirecTV and/or EchoStar enter any other market where he owns TV stations, he says.

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