Charter Communications’ Spectrum customers could miss out on a holiday tradition: watching KTLA Channel 5’s television coverage of the Tournament of Roses Parade in Pasadena.
Charter and Chicago-based Tribune Media, which owns KTLA and 32 other television stations in Charter markets, including San Diego County, have spent the last few days trying to hammer out a new agreement under which Charter can transmit Tribune’s station signals. The two sides have been wrangling over key details of the carriage agreement, including a proposed fee hike by Tribune, with a looming deadline of 9 p.m. PT Monday — that’s New Year’s Eve.
Without a new pact in place, or an agreement on a short-term extension, Charter would be forced to remove Tribune station signals from its cable lineup just hours before KTLA begins its marathon parade coverage. Spectrum is the brand name for Charter’s pay-TV, internet and phone service.
Charter, based in Stamford, Conn., has been balking at fee increases proposed by Tribune Media. Like other cable operators, Charter has been struggling to control programming costs in an effort to staunch a migration of customers to lower-cost streaming services. 2018 has been a bruising year for traditional pay-TV operators with the industry on track to lose 1.1 million customers this year, including more than 200,000 cable TV subscribers from Charter, according to recent estimates from MoffettNathanson Research.
“We’ve offered Spectrum fair market rates for our top-rated local news, live sports and high-quality entertainment programming, and similarly fair rates for our cable network, WGN America,” Tribune Media spokesman Gary Weitman said in a statement. “Spectrum has refused our offer.”
More than 6 million homes in Spectrum markets, including 1.5 million in Los Angeles, would be affected by a local station blackout. KTLA’s morning newscasts are among the highest-rated in Los Angeles, and the station’s Rose Parade broadcasts are particularly popular, drawing more than a third of the local TV audience on New Year’s Day. Tribune’s KSWB Channel 5 in San Diego also airs the Rose Parade.
In addition, Tribune owns cable channel WGN America and several CBS and Fox station affiliates such as KSWB. An outage would mean that customers in those markets would lose easy access to college bowl games and even the NFL football playoffs, which begin Jan. 5.
Charter, for its part, hopes to avoid a blackout that would rile customers.
“We continue to negotiate with Tribune and hope to reach a fair agreement,” a Charter spokesman said.
Elsewhere, other carriage fee disputes are brewing, with end-of-the-year contract showdowns increasingly becoming a TV industry tradition. Burbank-based Walt Disney Co. has been playing hardball with Verizon Communications, which still operates its Verizon FiOS television service on the East Coast.
Without a deal in place by New Year’s Eve, 4.6 million Verizon subscribers could lose ESPN — an uncomfortable prospect for Verizon because of the cable sports giant’s full roster of college bowl games. Disney-owned ABC stations in New York and Philadelphia would be included in the outage, however, Disney said this week that “negotiations continue in earnest and we remain optimistic that we can reach a deal.”
In addition, station owner Nexstar Broadcasting Inc. is threatening to go dark on New Year’s Day on the small Madison, Wisc.-based TDS Telecom, which serves communities in New Mexico, Colorado, Utah, Texas and Oregon — unless the companies reach a truce.
There have been 137 television blackouts in 2018, including an unresolved and protracted dispute between satellite TV provider Dish Networks and Spanish-language media giant Univision Communications. Blackouts are down substantially from a record of 213 outages in 2017, according to the American Television Alliance, a Washington-based lobbying group that represents pay-TV operators.
The tug-of-war is over so-called retransmission fees — the money that cable, satellite TV and telephone companies must pay to broadcast local TV station signals as part of their channel lineups. Television station owners this year will collect a combined $10 billion in such fees, up from $9.3 billion in 2017, according to the alliance.
Retransmission fees have also been the sticking point in the current contract talks between Tribune and Charter, according to people close to the negotiations who were not authorized to comment publicly.
The Tribune situation is not the only dispute that Charter is facing.
The taxpayer-supported California Public Advocates Office filed a petition late last week to reopen the Public Utility Commission’s approval of Charter’s 2016 takeover of Time Warner Cable, which turned Charter into the largest pay-TV operator in Southern California with about 1.8 million customer homes.
The Public Advocates Office alleged in legal papers that Charter has not been forthcoming with information about how many homes in California now have access to internet download speeds of at least 300 megabits per second. As part of an agreement to win the commission’s blessing for the merger, Charter promised that all homes in areas that it serves in California would have access to such speeds by the end of 2019.
In a statement last Friday, a Charter spokesperson said the company was “ahead of schedule” in rolling out the higher internet speeds. “We will continue to advocate our position at the PUC.”
Meanwhile, New York state authorities have taken a tougher stance on Charter’s operations. New York regulators have threatened to kick Charter out of New York unless the company steps up its efforts to roll out high-speed internet service in rural areas, as it promised when New York approved Charter’s Time Warner Cable acquisition nearly three years ago. Charter is the largest pay-TV operator in New York with 2 million customer homes.
Charter stock closed up 35 cents to $285.08 on Friday. Its stock is down 18% this year.
Meanwhile, Charter has worked to make inroads with customers in Southern California, including in November launching its 24-hour local news channel, Spectrum News 1. Charter and the Los Angeles Times recently announced the two companies would collaborate on a prime-time news magazine show, “L.A. Times Today,” beginning in February that would feature reporters and editors from The Times discussing news stories.