The broadcaster has begun to warn more than 1.5M viewers in 14 markets that its stations could disappear from Time Warner Cable and Bright House Network systems at the end of next week unless the companies reach a new retransmission consent agreement. Stations at risk include LIN TV‘s NBC, CW, and MyNetworkTV affiliates in Austin; CBS and CW stations in Buffalo, NY; NBC and CW outlets in Dayton, OH; and Fox and CW stations in Green Bay, WI. The two cable companies account for about 20.6% of LIN’s viewers, according to SNL Kagan data. LIN says on its Buffalo CBS affiliate’s website that “It costs a substantial amount of money to produce local programming, bid for top-quality programming, invest in high-definition, and make other upgrades to equipment and technology so we can deliver a superior product.” It adds in a statement that it wants “less than what Time Warner pays for many of its cable networks with far lower ratings.” But Time Warner Cable spokesman Jon Gary Herrera says that LIN is asking for a 50% rate hike, “a very steep increase from a contract negotiated two years ago.” Stations and pay TV companies typically settle retransmission consent disputes at the eleventh hour. But LIN’s stations were blacked out on Time Warner Cable for 25 days in fall 2008 when negotiations reached an impasse.
It will take years before most ad sales will hit the peaks that TV stations saw in 2007, Moody’s Investors Service analyst Carl Salas says this morning in an industry report. Local businesses have been slow to increase their spending after the economy tanked in 2008 and 2009 — and now broadcasters must compete for those dollars against websites, social media, digital displays and other emerging media. Sure, stations will see some extra cash from retransmission consent deals with pay TV providers. But it won’t be a windfall: Major networks are demanding reverse compensation agreements from their affiliates, giving the national broadcasters much of the dough collected by the stations that they used to pay to carry their programs.
UPDATE, 2 PM: The market deteriorated as the day wore on, continuing the worst market slump since 2008. The Dow Jones U.S. Broadcasting and Entertainment Index closed down 7.3% — exceeding the 5.6% decline in the Dow Jones Industrial Average, 6.7% drop in the Standard & Poor’s 500, and 6.9% fall at NASDAQ. CBS’ -10.3% slide made it the leading loser among media’s Big Guns. It was followed by News Corp (-7.7%), Viacom (-7.1%), Comcast (-6.6%), Sony (-6.4%), Disney (-6.1%), and Time Warner (-5.8%).
Double-digit losers include AMC Networks (-12.8%), LIN TV (-12.7%), Sirius XM (-12.7%), RealD (-12.6%), Cumulus Media (-11.9%), TiVo (-11.4%), Entercom (-10.9%), Westwood One (-10.8%), and E.W. Scripps (-10.3%). Those losing at least 9% include National CineMedia, Dish Network, Arbitron, Sinclair Broadcasting, Rovi, Outdoor Channel, Crown Media, Electronic Arts, Cablevision, and Coinstar.