Sinclair and Time Warner Reach Retrans Terms
January 26, 2007
Sinclair and Time Warner hammered out a three-year retransmission consent agreement. The deal assures that 6 million Time Warner Cable subscribers will receive the digital and analog signals of 35 Sinclair stations in 22 markets through Dec. 31, 2009.
"We are excited that this agreement not only ensures retransmission of our signals by Time Warner for the next three years, but also provides for the carriage of our digital signals for the first time to most of Time Warner's subscribers," said David Smith, president and CEO of Sinclair.
Sinclair Broadcast Group has been on the forefront of an effort by broadcasters to get paid for their signals vis-à-vis cable networks. Cash terms of the deal were not disclosed, but the chief of another cable company embroiled in a retrans fight with Sinclair said he'd take them.
"Now that Sinclair has reached a long term deal with Time Warner, whose terms presumably reflect the current market for retransmission consent, Sinclair should have no further excuses offering similar terms to Mediacom," said Rocco B. Commisso, chairman and CEO of Mediacom.
Earlier this month, Sinclair pulled 22 of its stations in 13 states off of Mediacom systems after the two companies came to a stalemate on retrans conditions. The companies are about $1 million apart, according to Forbes.
The fallout has affected about 700,000 Mediacom subscribers, one-third of whom live in Iowa. That state's legislature Tuesday called Sinclair and Mediacom to the carpet and told them to settle. The Sioux City Journal said that while state lawmakers can't force the situation, they've put the TV companies on notice that the Iowa congressional delegation will likely get an earful. Commisso earlier implored Congress to hold a hearing on the standoff.
According to analysts, Sinclair is faring better in the showdown than Mediacom, especially in light of the deal with Time Warner--Sinclair's biggest cable carrier. Victor Miller of Bear Stearns said the Time Warner deal put Sinclair on a "run rate" of $35 million to $40 million in overall retrans revenues.
Mediacom, on the other hand, is believed to be bleeding subscribers. Rich Greenfield of Pali Research estimates that the cable company could be losing up to 5,000 subscribers a week.
"We find it hard to believe that Mediacom management does not recognize how poor its negotiating position is relative to Sinclair," Greenfield said.