CBS, Dish Network strike deal after 12-hour blackout, marathon talks

Blackout ends as CBS programming is restored to Dish Network systems after a deal is reached

Nearly 500,000 Dish Network subscribers in the Los Angeles area experienced a 12-hour blackout of CBS programming before the two companies made peace early Saturday, just in time for weekend football.

CBS and Dish Network agreed to a new carriage contract after marathon negotiations that went through the night. The accord, which came shortly before 5 a.m. Saturday, ended the brief blackout of CBS-owned stations for millions of Dish subscribers around the country.

The temporary outage interrupted service of two CBS-owned TV stations in Los Angeles — KCBS-TV (Channel 2) and KCAL-TV (Channel 9) — for Dish customers.

In the end, the two companies decided to play “Let's Make A Deal.”

Financial details of the new arrangement were not disclosed, but CBS said it came away with the fee increases that it had been looking for. CBS also won concessions from Dish about the deployment of Dish's controversial AutoHop ad-skipping digital recording device.

Dish agreed to disable the ad-skipping function for CBS prime-time shows for seven days after a show's initial airing on TV. The agreement covers prime-time programming that runs on CBS-owned television stations.

For its part, Dish secured new digital rights for some CBS programming, including video-on-demand content for the premium channel Showtime. However, Dish did not win permission to include Showtime in a new Internet streaming service that Dish is planning to roll out.

“We are pleased to continue delivering CBS programming to our customers,” said Warren Schlichting, Dish's senior vice president for programming.

The two companies have been haggling nearly around-the-clock since earlier in the week when CBS said it would not grant any further contract extensions for a pact that expired on Nov. 20.

The two sides had been making progress at the bargaining table, but talks broke down Friday. CBS wanted to hold Dish's feet to the fire, and demanded that Dish remove the signals of CBS' 26 television stations as of 4 p.m. PST Friday.

By early Saturday, the new agreement was in place. Dish was then authorized to retransmit the signals of CBS-owned stations to its customers in 14 markets, including Los Angeles, Sacramento, San Francisco, Denver, Dallas, Chicago and New York.

Dish, which is headquartered in suburban Denver, was under considerable pressure to end the blackout quickly. The satellite TV company didn't want to go the entire weekend without the programming of CBS, the nation’s No. 1 network. CBS was scheduled on Sunday to broadcast several NFL football games, including matchups featuring the Denver Broncos, Miami Dolphins, Pittsburgh Steelers and Arizona Cardinals.

“The people who get hurt the most are always the subscribers,” Bobby Campbell, a longtime Dish subscriber who lives in Mound, Minn., said late Friday.

CBS was determined to come away with a hefty increase in the retransmission fees it charges Dish to carry the signals of CBS-owned stations.

“We are very pleased with this deal, which meets all of our economic and strategic objectives,” said Ray Hopkins, president of television networks distribution for CBS.

TV companies have been grappling with changes in audience behavior, and CBS has aggressive goals to boost programming fees that pay-TV companies pay. The New York-based broadcasting company has been trying to diversify its revenue so it is less reliant on advertising.

However, the complexity of the agreement — CBS' proposed fee increase, digital rights and complications over Dish's controversial ad-skipping Hopper device — made reaching a deal a contentious proposition.

As a result of the accord, CBS and Dish said they have agreed to dismiss all pending lawsuits between the two companies, including a 2012 dispute over Dish's AutoHop ad-skipping feature.

Twitter: @MegJamesLAT

Copyright © 2016, Los Angeles Times

UPDATES

9:04 a.m. This story was updated throughout with additional details about the agreement and background information about the negotiations.

6:18 a.m. This story was updated with additional details about the agreement.

This story was first published at 6:01 a.m.

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