In the latest retransmission fee dispute to reach the point of service interruption for customers, Cablevision Systems (NYSE: CVC) has blacked out several TV stations owned by the Tribune Co.'s broadcasting unit. Cablevision issued a statement Friday defending the move to block distribution of Tribune stations WPIX, WCCT, KWGN and WPHL. The cable TV company alleged that the Tribune Co., which is attempting to emerge from bankruptcy, is trying to hike fees to feed its institutional investors.
The Cablevision statement in part reads: "The bankrupt Tribune Company and the hedge funds and banks that own it, including Oaktree Capital Management, Angelo Gordon & Co. and others are trying to solve Tribune's financial problems on the backs of Cablevision customers. Tribune and their hedge fund owners are demanding tens of millions in new fees for WPIX and other stations they own."
As usual in contract fights, the broadcaster claimed it was blindsided by the blackout. The Tribune co. issued its own statement saying Cablevision put its stations in the dark without warning and in the middle of the contract negotiation process.
"Cablevison took this action despite our offer of an unconditional extension of the current carriage agreement with no change in terms while negotiations continued. To be clear, Tribune was willing to provide Cablevision subscribers access to the valuable programming on these stations while working toward a new agreement. Tribune never made any threat to withdraw these stations or any demand that Cablevision remove them."
The Tribune Co. is indeed seeking a first-ever retransmission fee for the stations, and in explaining the modesty of its demand put the fee in the perspective of many a late-night TV commercial sales pitch: "What we have proposed amounts to less than a penny a day per subscriber, well below what Cablevision pays to providers of less well-watched channels," the statement reads.
The Tribune Co. actually received court approval to exit bankruptcy last month, but is not out of the woods yet. There have been fears that some creditors could attempt to appeal the ruling, an action that could cost the company an addition $1.5 billion to $3 billion. Meanwhile, Tribune Co. has been increasing efforts to seek greater compensation for its broadcast assets, most recently becoming embroiled in a similar dispute with DirecTV.
-here's the Cablevision statement
-here's the Tribune version
DirecTV and Tribune Broadcasting also fought over fees
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