To the surprise of many given its extensive duration, CBS and Comcast announced a long-term deal last week that secures subscriber fees for its local stations on Comcast cable systems for the next 10 years.
Financial terms of the deal were not disclosed, but CBS said it had never reached a carriage deal of this length before. Last year, the network reached a five-year deal with Time Warner Cable, the nation’s second-biggest cable provider behind Comcast.
The deal also includes “TV Everywhere,” an Internet extension that allows Comcast subscribers with a password to view programming on the Internet.
Leslie Moonves, president and chief executive officer of CBS, has been vocal in demanding retransmission fees from cable systems for the right to carry local television stations. Traditionally, local broadcast stations were free and cable systems paid only for cable channels.
This deal “says to the marketplace, ‘Yes, people are paying for retransmission,’” Moonves told the “New York Times.”
It may have helped CBS that Comcast is trying to purchase NBC and is on its best behavior as the FCC is considering the deal.
Anthony DiClemente, an analyst with Barclays Capital, projected in a research report last week that CBS would earn about 50 cents a month per subscriber from the Comcast deal in markets where CBS owns television stations. Beginning in 2012, that’s a total of about $75 million a year. DiClemente said the fees would probably escalate over time, eventually increasing to about $1 a month.