Cable operators are set to take their fight to Congress--at least if it helps prevent further programming blackeyes like the one Cablevision (NYSE: CVC) suffered in its fight with News Corp. (Nasdaq: NWSA)
Because "everyone is required to buy the product no matter the price" the broadcasters have an upper hand in negotiations, especially when they can use blackouts as the ultimate leverage, Cablevision Systems COO Tom Rutledge will say in a prepared statement delivered to the Senate Commerce Committee on communications, technology and the Internet. The committee, chaired by Massachusetts Sen. and former presidential wannabe John Kerry, is convening today to discuss ways to make retransmission consent negotiations more amenable.
The committee will have its work cut out. The tradeoff point--that of the programmers--is that any "so-called reforms ... would clearly tip the balance of negotiations towards distributors (service providers), according to testimony to be delivered by News Corp. COO Chase Carey. "If we can't sell our content for a price that allows us a fair return on our investment, we will no longer be able to invest in the high quality content that viewers enjoy," said the man whose Fox Networks carry Always Sunny in Philadelphia and The League.
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