03.03.2011 11:00 AM
Sinclair Cut Retrans Agreement Hours Before FCC Reconsiders Rules
HUNT VALLEY, MD., and PHILADELPHIA: Sinclair
announced a retransmission agreement-in-principle this morning with Comcast,
just as federal regulators prepare to reconsider its rules governing the
Sinclair recently closed out retrans deals for 28 stations carried by Time
Warner Cable; and for six stations served by Bright House. The Time Warner
negotiations grew strident and extended nearly four weeks after the previous
contract expired, though no stations were pulled from cable systems. The deal
with Comcast covers 36 TV stations in 22 markets for an unspecified number of
years. It was achieved quietly.
Wells Fargo analyst Marci Ryvicker estimated the Comcast deal covers around 5.2
million of the provider’s roughly 24 million subscribing households. She said
it “likely represents $2 million to $3 million more in retrans” revenues.
“We were happy to see that SBGI and CMCSA were able to reach an agreement
without a public argument,” Ryvicker said, using the ticker symbols for
Sinclair and Comcast. “This gives us hope that SBGI’s other major contract
coming due later this year--Cox in H1--will also be completed in a timely
Retransmission negotiations are a phenomena of HDTV. When cable operators
started charging a premium for hi-def tiers, broadcasters, providing a majority
of those signals at the time, wanted a piece of the revenue. Disney’s ABC and
Time Warner Cable affected the first high-profile retrans stand-off more than a
decade ago, with ABC pulling “Who Wants to Be a Millionaire” when the show was
at the peak of its popularity.
Acrimonious retransmission negotiations have been playing out in the public
arena since then. Lawmakers finally had enough last year after Fox stations
were pulled from Cablevision systems for 15 days that included the first game
of the World Series. Several urged Federal Communications Chairman Julius
Genachowski to take up retransmission consent reform. FCC Media Bureau Chief
Bill Lake announced the commission’s intention to do so in mid-December. The
item is on today’s meeting agenda.
One of the things cable operators have most agitated for is to have the FCC
prohibit broadcasters from pulling their signals during negotiations when
contracts expire. The general expectation from the FCC is to let market forces
take their course.
“We do not anticipate any material change to the method of negotiations,”
Ryvicker said in her note.
Robert McDowell, one of two Republicans on the commission, told broadcasters
earlier this week to continue negotiating and to not expect substantial intervention
from the FCC. House Energy and Commerce Chairman, Fred Upton (R-Mich.) said he
didn’t believe Congress should get involved, nor that the FCC should compel
-- Deborah D. McAdams