CBS (NYSE: CBS) is putting the pressure on Time Warner Cable (NYSE: TWC) to end the month-long blackout over retransmission fees by airing commercials featuring football stars encouraging fans to dump Time Warner Cable in favor of other providers.
The ads, which CBS aired in three major U.S. markets this week, feature NFL quarterbacks Eli and Peyton Manning telling fans "to tell their friends with Time Warner Cable to switch providers now, so they'll be ready for the games on CBS." In addition, the ads include clips of the brothers, who will face each other in a Sept. 15 game between the Denver Broncos and New York Giants.
CBS and Time Warner Cable have been in a battle over retransmission fees since Aug. 2. On that date, Time Warner Cable blacked out CBS and its sister channel Showtime from its systems in Los Angeles, New York, Dallas and some smaller markets, affecting some 3 million homes.
Analysts predict the blackout will end around NFL regular-season kickoff on Sept. 8 because both sides fear backlash from football fans. Analyst Craig Moffett of Moffett Research told Reuters that CBS sports programming is too valuable for Time Warner Cable to remain dark after football season starts.
According to SNL Financial, CBS was receiving between $0.65 to $0.75 per subscriber per month from TWC, but is now arguing that figure should be increased to $2. If that new price sets a standard in the industry, the money generated from retransmission fees industry-wide would rise to more than $12 billion in 2018. SNL said it estimates the industry will generate around $3 billion in retrans fees this year.
- see this Reuters article
Analyst: CBS/TWC retrans battle could 'alter the economics' of industry
Time Warner/CBS battle could set pattern for future retrans deals
TWC offers subs free antennas as CBS blackout reaches Week 3
Time Warner Cable pitches NFL Network, online video as CBS alternatives
Time Warner Cable dumps CBS, Showtime from systems in New York, Los Angeles, Dallas
Time Warner Cable restores CBS, Showtime after brief blackout