CBS warns of potential blackout on Dish Network

With a deadline looming, CBS warns of a blackout on Dish Network systems, including in Los Angeles

With negotiations going down to the wire, CBS is warning of a potential blackout of its TV stations -- which air some of the nation's most popular programs -- for millions of customers of satellite giant Dish Network.

Dish's current distribution contract with CBS expires Thursday, which could lead to a blackout of CBS' signal in 14 markets, including Los Angeles, San Francisco, Sacramento, New York, Dallas, Denver and other cities where CBS owns a station.

The two sides are in negotiations, but CBS appears to be playing hard ball -- using its strong prime-time lineup and coverage of the NFL and college football as leverage to extract an increase in the fees it charges for the retransmission of signals from CBS' television stations.

“Dish has been deliberately dragging its feet for months," CBS said Tuesday in a statement. "Now, as the deadline nears, Dish appears willing to drop the most popular programming in its entire channel line-up because it won’t negotiate the same sort of deal that other cable, satellite and [telecommunication] companies have struck with CBS."

A blackout would mean that Dish customers in the affected regions might not see this weekend's college football and NFL games, as well as such prime-time shows as "Blue Bloods," "NCIS" and "The Big Bang Theory."

Dish has nearly 500,000 customers in the Los Angeles region, which is served by CBS' KCBS-TV Channel 2 and KCAL-TV Channel 9. Both stations would be included in a blackout. 

Dish customers already are without CNN, Turner Classic Movies and Cartoon Network. Dish dropped those channels last month after a carriage agreement with Time Warner's Turner Broadcasting unit expired.

On Tuesday, Dish said it was engaged in negotiations with CBS, and that there was plenty of time for the two sides to hammer out a "mutually beneficial" agreement.

"Only CBS can force a blackout of its channels," Dish said in its statement. "Dish is actively working to reach a deal before the contract expires and has successfully negotiated agreements representing hundreds of stations in recent months that benefit all parties, including our viewers."

Earlier this month, Dish Chairman Charlie Ergen said that though he no longer considers CNN a must-have channel, CBS was essential.

"Certainly, CBS is a core product. ... I would certainly think that you will see them on Dish," Ergen said during a Nov. 4 conference call with Wall Street analysts.

Distribution companies, including Dish, increasingly are on the defensive as they try to manage programming expenses in an effort to prevent more defections of customers to lower-cost services.

With 14 million customers, Dish is the third-largest pay-TV provider in the nation. It has long been one of the most aggressive in its battles with programmers to try to hold the line on carriage costs. 

Meanwhile, programmers such as CBS have been emboldened to use the popularity of their offerings as leverage at the negotiation table -- and to rally viewers to choose sides during contract disputes.

Since Friday night, CBS has been airing commercial messages in the 14 affected markets to warn of a potential blackout. The message encourages viewers to call an 800 number, which routes them into Dish's call centers.

CBS on Tuesday boasted that it is the most popular programmer among Dish's customer base, which should give the broadcasting company plenty of clout. However, millions of Dish subscriber homes in rural areas would not be affected by a blackout because they are served by CBS affiliates, which are owned by third-party companies.

The stakes are high for both companies, but particularly for Dish.

The satellite giant's third fiscal quarter was marked by more extensive customer cancellations than analysts had been forecasting. Dish lost 12,000 pay-TV customers during the July through September period.

CBS survived a monthlong blackout on Time Warner Cable systems in 2013. That summer outage ended badly for Time Warner Cable, which lost 300,000 subscribers during that quarter.

Time Warner Cable ended the dispute by caving in to CBS' demands on deal terms.

Twitter: @MegJamesLAT

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