The tense negotiations for a new distribution deal between CBS and Time Warner Cable turned bizarre Monday night as the pay-TV distributor started to pull down networks owned by CBS, only to stop the process after a few minutes.
Around 9 p.m., Time Warner Cable alerted the media that it was pulling down channels owned by CBS including KCBS-TV Channel 2 and KCAL-TV Channel 9 in Los Angeles, KCBS-TV in New York and the cable network Showtime.
Time Warner Cable said in a statement that the “outrageous demands” by CBS forced it to remove several of its networks and local stations from its lineups. “We offered to pay reasonable increases, but CBS’s demands are out of line and unfair – and they want Time Warner Cable to pay more than others pay for the same programming,” the company added.
“We’re at war with Time Warner Cable,” CBS Chief Executive Leslie Moonves said after a reporter showed him Time Warner Cable’s statement during at a party the network was throwing at the Beverly Hilton to promote its fall television season.
But the war was short-lived as Time Warner Cable subsequently put out a statement that the channels had been restored at the request of CBS.
CBS then issued a statement that said negotiations with Time Warner Cable had resumed.
Although squabbles between programmers and distributors are fairly common, seldom does it reach a point that a signal gets taken off the air, especially in big markets such as Los Angeles and New York.
But as programmers become more aggressive by seeking higher fees from tight-fisted distributors, more blackouts are likely. The Federal Communications Commission typically prefers not to weigh in on such matters, although there have been calls from Congress to overhaul the so-called retransmission consent rules that allow broadcasters such as CBS the right to negotiate for carriage fees.
Consumers, of course, can still receive the CBS signal over the air for free with an antenna. Some CBS content is also available online. “Under the Dome,” for example, can be seen on the Amazon Prime streaming service, although a subscription is required.
CBS is seeking a big increase in distribution fees for its stations, which Time Warner Cable is resisting. CBS, the most-watched TV network, argues that it is undervalued compared to cable channels that have lower ratings but collect higher distribution fees from pay-TV operators.
Media analyst David Banks of RBC Capital Markets said in a recent report that CBS is looking to increase the fee Time Warner Cable currently pays from less than $1 per-subscriber, per-month to a figure approaching $2 in the first year and with subsequent increases in later years.
Follow Joe Flint on Twitter @JBFlint.