Lin TV dark on Time Warner

Talks continue in retransmission-fee battle

NEW YORK -- In a possible preview of similar battles to come, TV station group Lin TV pulled the signals of 15 stations in 11 markets off Time Warner Cable systems, affecting about 2.7 million of the cable giant's subscribers.

Friday's move, a result of the latest retransmission-fee battle in the industry, left satellite TV and telecom rivals offering themselves as an alternative to TWC.

The two sides remained in negotiations as of Sunday afternoon. A TWC spokesman said Sunday that the cable operator has so far given away nearly 50,000 antennas to allow at least some of its subscribers to receive Lin TV broadcast signals over the air while the dispute continues.

Lin and TWC's retrans pact expired at midnight after last-minute negotiations Thursday, and Lin decided to yank its programming from TWC rather than go for an extension.

Lin shares set a 52-week low of $3.74 before closing at $3.80, down 11.4%. TWC shares closed up 0.9% at $22.46.

"Going dark is no fun, and we're very sorry that Lin has chosen that option by removing their signal," a TWC spokesman said. "Our main concern is getting this programming to our customers without forcing them to break open their piggy banks to pay for it."

He added that talks seemed to make progress when Lin pulled its signals.

But a Lin spokeswoman said TWC had dragged its feet ahead of the deal deadline.

"Time Warner has known since August that the contract expired on Oct. 2," she said. "We previously offered TW an extension, and they didn't accept it, nor even respond. They finally sent their first serious proposal late (Thursday) afternoon, and we worked diligently beyond midnight to close the gap but were unsuccessful."

Lin put further pressure on TWC by posting information on alternative multichannel TV providers on its corporate and station Web sites. Some mentioned up to $50 in incentives to switch to Dish or other providers.

Miller Tabak analyst David Joyce said the dispute was a key test case.

"Lin TV wants perhaps (30 cents) per month per subscriber in retransmission fees," he said, "while TWC does not want to set a precedent of such high payments ahead of thousands of other TV station agreements, for all multichannel video providers, that are expiring at the end of the year."

Observers mentioned football season as a possible motivator for TWC to continue pursuing a resolution of the dispute during the weekend.

"We expect Time Warner Cable subscribers to begin seeking alternative video providers over the coming days, particularly in markets where NFL programming is a major issue, such as in Green Bay, Wis., where the Packers game is set to air on Fox this Sunday," Pali Research analyst Richard Greenfield said in a blog post Friday. (LIN owns the Fox affiliate in Green Bay.) "This sets a worrisome tone for how TWC will deal with retransmission-consent negotiations with other broadcasters over the coming months, with Univision set to be the most contentious retrans battle."
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