After brief blackout, CBS, Time Warner Cable extend talks

cbs2.jpg This is getting too weird. For much of Monday a deal between the network and the cable operator seemed within grasp. But at around 9 p.m., Time Warner Cable pulled the plug on KCBS and KCAL programming, only to put the plug back in about 30 minutes later. So now they've extended the deadline to Friday afternoon. Last-minute contract talks between a cable company and one of its content providers are not unusual, but blacking out programming in the nation's two largest markets (and in prime time, no less) is definitely out of the ordinary. The dispute centers on what's known as re-transmission fees, which is what broadcast stations ask cable companies to pay in order to carry content. The stations have been getting between 75 cents and a dollar per subscriber per month, according to several news reports, with CBS demanding roughly twice that amount. The company has told its shareholders that these fees represent a big source of future growth, which is one reason why CBS stock has been on a tear of late. (It's also why there's so much interest these days in buying TV stations.) As you might guess, Time Warner Cable wasn't thrilled about having to pay so much more money to carry the CBS-owned stations - not to mention the precedent it would set in negotiating with other stations groups. The reality, of course, is that each side needs the other. CBS would lose huge amounts of advertising revenue and Time Warner Cable runs the risk of losing customers if CBS network shows are not available.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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