CBS, Comcast ink 10-year content deal

8:12 AM PST 08/02/2010 by Georg Szalai, AP

Greater access to content agreed before end of prior deal

NEW YORK -- CBS Corp. and Comcast Corp., the largest U.S. cable operator, on Monday unveiled a 10-year content and carriage agreement that provides for retransmission consent of CBS TV stations until the year 2020, among other things.

At a time when many carriage arrangements have been negotiated down to the wire and some networks have been pulled from the air temporarily, this pact comes 18 months before the previous deal expired.

It also includes carriage of CBS Corp. cable networks, such as the Showtime Networks, Comcast's agreement to launch the Smithsonian Channel and expanded distribution of CBS College Sports. Comcast also gets "greatly expanded" on-demand access to CBS Corp. content via their cable and online platforms as part of the deal, the companies said.

For example, CBS's "Late Show with David Letterman" will join Comcast's on demand universe, and Showtime content - which includes hits shows like "Dexter," "Weeds" and "Californiacation" and films like the "Twilight" series - will be more broadly available on demand. Plus, Showtime content will for the first time become available to Comcast subscribers online.

In another potential benefit for Comcast, the deal will allow it to underline how collaborative it can be in negotiations with rivals of NBC Universal, in which it is planning to acquire a majority stake.

Financial details weren't disclosed.

According to analysts, CBS has received an average of about 50 cents per subscriber per month in retransmission fees for its CBS stations in previous deals with distributors. However, industry observers say it is often difficult to parse out the value of specific programming in broad content deals like this one.

"This is definitively a positive for CBS, which didn't have to sign such a long-term deal if they weren't getting good economics," said Miller Tabak analyst David Joyce. He suggested though that Comcast shares were down slightly following the news "on the notion that there has to be a winner in these deals, which we don't necessarily believe." Even if Comcast paid up a bit to get a broad, long-term deal, "there is greater certainty in their cash flow streams going forward," the analyst explained. 

"This points to Comcast trying to be very friendly in dealing with all constituents who may complain to the FCC and (Justice Department) about the potential power a Comcast/NBC Universal deal may have," Joyce also told THR.

Indeed, top executives at the entertainment and the cable giant called the agreement good business for both sides and exchanged compliments about each other's vision.

"This agreement demonstrates the enduring value of CBS's content across our company," said CBS president and CEO Leslie Moonves before lauding Comcast management: "This deal could not have happened without the vision of (chairman and CEO) Brian Roberts and (COO) Steve Burke."

Roberts highlighted CBS's "valuable programming" and how this deal ensures its availability across multiple platforms. "Les Moonves has been a real leader as the media industry experiments and moves toward delivering content to customers whenever and wherever they want to watch it," he continued. "We are proud to partner with CBS as we give our customers the content they love on TV, video on demand and online."

Roberts also made indirect mention of recent carriage disputes. "In this time of rapidly changing technology and viewership interest, we were able to structure a deal that gives customers the content they want without any threat of disrupting their service," he said.
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