TWC and CBS reach deal to end blackout

CBS (NYSE: CBS) and Time Warner Cable (NYSE: TWC) have ended their month-long battle over retransmission fees, announcing CBS programming will return to Time Warner Cable and Bright House Networks customers within 24 hours.

The companies said the agreement includes retransmission consent as well as Showtime Anytime and VOD for CBS stations on Time Warner Cable systems in New York (WCBS and WLYW), Los Angeles (KCBS and KCAL) and Dallas (KTVT and KTXA.)

Terms of the deal were not disclosed, though it appears both sides agreed to some degree of compromise. According to financial research firm SNL, CBS was receiving between $0.65 to $0.75 per subscriber per month from TWC before the blackout, and had been pushing for an increase to $2 per subscriber per month.

"We're pleased to be able to restore CBS programming for our customers, and appreciate their patience and loyalty throughout the dispute," said Glenn Britt, Time Warner Cable's Chairman and CEO. "As in all of our negotiations, we wanted to hold down costs and retain our ability to deliver a great video experience for our customers. While we certainly didn't get everything we wanted, ultimately we ended up in a much better place than when we started."

Britt also reiterated his call for Congress and the FCC to reassess the 1992 retransmission consent rules, which he called "woefully out of date."

In an FAQ for customers on its website, TWC said that it scored a better agreement with CBS than the one CBS initially proposed. "Q: Did TWC end up paying 600% more for these stations than other markets?" TWC wrote in its FAQ, answering: "We won't discuss specific deal terms. But no, we reached a deal that is significantly better than the one first proposed by CBS."

However, CBS appears to be claiming victory in the negotiations, at least judging by the tone in a letter sent by CBS CEO and President Leslie Moonves. "The final agreements with Time Warner Cable deliver to us all the value and terms that we sought in these discussions," Moonves wrote in an email announcing the news that was reported by a number of media outlets. "We are receiving fair compensation for CBS content and we also have the ability to monetize our content going forward on all the new, developing platforms that are right now transforming the way people watch television."

The protracted blackout generated a significant amount of interest from customers and those in the industry, and even drew commentary from the FCC. "At the end of the day, media companies should accept shared responsibility for putting their audience's interests above other interests and do all they can to avoid these kinds of disputes in the future," Acting FCC Chairwoman Mignon Clyburn said in a statement after TWC and CBS announced a deal.

Analysts predict the blackout would end around NFL regular-season kickoff on Sept. 8 because both sides fear backlash from football fans.

The deal between TWC and CBS likely will set a new standard for retransmission negotiations.

For more:
- see this TWC release
- see this CBS release
- see this TWC FAQ
- see this letter from Moonves
- see this The Verge article

Related Articles:
CBS appeals to sports fans to pressure TWC to end blackout
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

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