Retrans War Redux in Spokane
When I read that KAYU, the Fox affiliate in Spokane, had yanked its signal from the Time Warner cable system in a retransmission fight [1/1, p. 5], I couldn't help but remember when Nexstar Broadcasting did the same thing in 2005. We demanded cash from cable operators and yanked signals in four markets until, eventually, the disputes were resolved.
The scenario at KAYU sounds eerily similar, right down to the rhetoric. Brian Brady, president of Northwest Broadcasting Corp., which owns KAYU, said the cable operator he's battling “puts no value on over-the-air broadcasting.”
That's about right. During our fight, our COO, Duane Lammers, (who, along with President/CEO Perry Sook, was the architect of Nexstar's cash-for-retrans plan), stood in the conference room across from my office waving a penny in front of some cable operators. We were offering to allow our signals to go back on the cable systems immediately if the cable operators would agree that they were worth “at least a penny” as a starting point for negotiations. They refused.
Eventually, Nexstar settled its disputes, and now the majority of the cable operators pay cash, which, over the next five years, will amount to about $50 million.
My advice for KAYU is to stand your ground. Educate the viewers. Tell them that the cable operators pay for every channel except the local-broadcast ones. And viewers might be paying up to $1 a month for little-watched channels like MTV. Encourage them to turn in their cable box for a satellite dish, since DBS pays for the local-broadcast signals. Urge viewers to watch your network programming—especially your local news—online. Use your news to keep the facts and the issue in front of your viewers.
My advice for cable operators: This ship has sailed. Paying broadcasters for the right to air their signals on the cable system is fair and overdue. And with local stations' ability to stream live programming and news directly to viewers, it's now in the best interest of cable operators to secure their right to retrans now, while the price is right.