Sinclair Broadcast Group could end up yanking 30 stations off of Comcast because of an ongoing battle over retransmission consent - leaving some 3 million customers without their broadcast signal.
Sinclair's carriage deal with Comcast is up Feb. 5 and the broadcaster is demanding cash from the cable operator to carry its stations in 23 markets. Comcast, the nation's biggest cable operator, is refusing to pay cash and says Sinclair is the only broadcaster with which it can't reach a deal.
But in an interesting twist, many of its stations can't go black then due to a federal law that says no in-market station can be pulled from cable during a sweeps period.
By demanding cash, Sinclair becomes the latest broadcaster to assert its legal right to demand money in exchange for allowing the cable operator to retransmit their signal. Last month, fellow station owner Northwest Broadcasting Corp.
on Time Warner Cable in three states because the two couldn't reach an agreement.
So far, stations have accepted advertising time from major cable operators or carriage of sister cable networks and have only gotten cash from satellite and small cable operators. Kagan Research projects that station owners stand to collect some $225 million in retransmission fees this year from cable and satellite operators and telcos, and $1 billion in 2009, the year some station owners’ cable deals, notably CBS, come due then.
The cable operators have historically said that they do not want to pay cash because they do not want to create higher bills for their customers, bills already getting hammered by the FCC as too high. Comcast would not say how much Sinclair was seeking and Sinclair did not return calls at press time.
In a statement, Comcast Corporation Executive Vice President David Cohen said: "Sinclair Broadcast Group, one of the nation’s largest broadcast television station owners, has demanded large cash payments from Comcast, and ultimately consumers, so that these customers can continue to view broadcast television stations that are available over-the-air for free. We do not believe that our customers should have to pay extra to watch free TV.
"We are currently negotiating with Sinclair to reach a fair agreement, but are not legally allowed to carry these channels without Sinclair’s permission. We will do everything in our power to avoid service interruptions without adding Sinclair’s proposed fees to customers’ bills."
Sinclair, which owns mostly Fox and MyNetworkTV stations, has had
with Time Warner and Mediacom. Time Warners rights to carry the Sinclair' station in Buffalo was up Dec. 31, according to Sinclair, but was extended until Jan. 12 when an agreement couldn't be reached, according to a Time Warner spokesperson. And Sinclair's contentious retransmission dispute with Mediacom - with Sinclair scheduled to pull 22 stations Jan. 5 - resulted in the cable operator filing a complaint
In a similar standoff, Nexstar pulled its stations off cable systems in four small markets in December 2004 after the operators refused to pay the 30¢ per subscriber rate Nexstar was seeking. Most of the disputes have been resolved, and Nexstar says the majority of cable operators are paying cash (however, CableOne and Cox, two of the biggest operators Nexstar fought, are not).
Nexstar says retransmission payments will go from almost zero to some 15% of the company’s cash flow over the next five years