CBS-TWC deal switched on

Pact for station retransmission, Showtime carriage extends to 2013

Time Warner Cable and CBS Corp. unveiled a broad carriage agreement Tuesday that extends a retransmission-consent pact for CBS' TV stations and carriage of Showtime Networks' programming through 2013.

It is the first such CBS deal with a major distributor for higher fees, with others expected to come up this year and beyond. Financial details of the deal weren't disclosed, but both sides claimed that they will benefit in what some spokespeople called a win-win.

Sources said terms of the retrans portion of the arrangement are in line with what CBS president and CEO Leslie Moonves talked about in the past. Moonves had no specifics to add Tuesday at an investor conference in Arizona.

"It's in the neighborhood we wanted it to be in," he told investors, adding that it will set the stage for similar deals in the future.

Overall, the Time Warner Cable deal puts CBS on track to make about $250 million in profit from retrans deals over the medium term, he said.

It's widely believed CBS was looking for as much as 50 cents per subscriber per month in retrans negotiations for the right to carry CBS stations, even though Moonves last year said that figure wasn't set in stone, with terms varying by size of the distributor and breadth of the arrangement.

The two sides didn't say Tuesday whether Time Warner Cable is paying cash, but one source suggested that the cabler is paying at least partially in the form of ads on CBS stations.

"The deal likely includes multiple components — including some cash and some advertising — and the compensation 'paid' by the distributor likely covers Showtime and some incremental services," Bernstein Research analyst Michael Nathanson said.

Carriage-fee talks between Time Warner Cable and Viacom ended in a public spat around New Year's before being resolved, but Viacom sibling CBS reached a deal with Time Warner Cable under the radar.

Sources said Time Warner Cable's Showtime carriage deal expired last year and continued under an extension, but the CBS retrans contract isn't up until the end of 2010.

With CBS looking to extend the Showtime part and Time Warner Cable interested in locking up content for VOD and such enhanced cable features as Start Over and Look Back, the two agreed on a broader five-year package.

Under the terms, select CBS and Showtime programs will be used for Time Warner Cable's Start Over and Look Back features as well as VOD offerings. Sources said all three "CSI" franchises are a lock for these offerings. "Survivor," "NCIS," "Numbers," the evening news, "The Early Show" and most other key CBS shows also are expected for the VOD lineup.
comments powered by Disqus