CBS, Dish Network extend deadline on talks, averting blackout

CBS, Dish Network extend deadline on talks, averting blackout
In Los Angeles, roughly 500,000 homes that have Dish service would have lost access to signals of two CBS stations — KCBS-TV Channel 2 and KCAL-TV Channel 9. (Matthew Staver / Bloomberg)

CBS Corp. and Dish Network have agreed to a deadline extension for a new contract, temporarily averting a blackout of CBS-owned television stations serving millions of satellite TV subscribers around the country.

The move suggests the two sides are making progress at the bargaining table. CBS, however, said little about the pace of the talks. It simply issued a brief statement late Thursday that it "agreed to a short-term extension while negotiations continue."


For now, viewers won't miss original episodes of "The Big Bang Theory," "Blue Bloods" and "Late Show With David Letterman." If the dispute gets resolved in the next few days, Denver Broncos fans in Denver would be able to watch their team battle the Miami Dolphins on Sunday. And Philadelphia sports fans should be able to watch the Eagles play the Tennessee Titans.

Consumers in recent years have been growing frustrated by the increasing tensions between programmers like CBS and pay-TV companies, such as Dish and Time Warner Cable. When the two sides battle it out, viewers say they are the ones who get caught in the crossfire.

Bobby Campbell, a technical recruiter, has been a Dish subscriber for 18 years. He and his wife, who live in Mound, Minn., also are loyal viewers of WCCO-TV Channel 4, the CBS station in Minneapolis.

"We definitely would consider switching to another service so we could get CBS," Campbell said Thursday in an interview. "That's the news we watch every day, and they broadcast the Vikings. The Vikings aren't that great — but they are all that we have."

The contract covers CBS-owned stations in 14 markets, including Los Angeles, Sacramento, San Francisco, Dallas, Minneapolis, Detroit and New York. In Los Angeles, roughly 500,000 homes that have Dish service would have lost access to signals of the two CBS stations — KCBS-TV Channel 2 and KCAL-TV Channel 9.

The contract was set to expire Thursday night.

CBS has been using its muscle — its popular prime-time and sports programming — to try to renew the deal with more favorable terms. The broadcasting company has been looking for a substantial hike in the fees it charges for the retransmission of CBS station signals.

Dish and other distribution firms increasingly are on the defensive as they try to manage programming expenses to prevent more defections of customers to lower-cost services.

"Content companies are starting to ask for rate increases that are substantial," said Anthony DiClemente, media analyst with Nomura Securities. "And distributors are trying to do an analysis based on the lesser of two evils: How do they keep all of these networks and pay higher fees? And if they don't keep these channels, will they lose more subscribers?"

CBS and Dish are said to be wrangling over several deal points, including digital rights and Dish's "Auto Hop" feature that allows customers to easily avoid commercials.

Since late last week, CBS has been warning of a potential blackout of its TV stations on Dish's systems. The New York-based broadcaster has been airing commercial messages that encourage viewers to call an 800 number, which routes them into Dish's call centers.

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. The pay-TV provider has several other carriage contract battles brewing, including another contract with Turner Broadcasting that covers TNT and TBS. A deal with NBCUniversal over carriage of several regional sports networks is expiring in early December.

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.

"It's just TV channels, it's not a life-changing event," said Campbell of Minnesota. "But we are paying darn good money for the service, and the channels we want should be there."


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.

"The content owners really have had the leverage in these negotiations," DiClemente said.

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