CBS, Time Warner Cable enter fight over fees

Thu Jul 18, 2013 8:17pm EDT

The Time Warner Cable office is shown in Carlsbad, California November 5, 2012. REUTERS/Mike Blake

The Time Warner Cable office is shown in Carlsbad, California November 5, 2012.

Credit: Reuters/Mike Blake

(Reuters) - Millions of Time Warner Cable customers in New York, Los Angeles and Dallas could miss out on the summer reruns of "The Big Bang Theory" and "NCIS" if the cable operator does not reach an agreement with No. 1 broadcast network CBS by July 24.

CBS launched a marketing campaign on Thursday, warning that customers in those three large markets could lose access to the network next week, when an existing agreement between the two companies is set to expire.

CBS wants to get paid for giving Time Warner Cable the right to carry its free-to-air broadcast networks, known in the industry as a "retransmission" fee.

"Time Warner Cable is planning to drop the most popular programming in its entire channel lineup because it won't negotiate the same sort of deal that all other cable, satellite and telco companies have struck with CBS," the broadcast network said in a statement.

Meanwhile, Time Warner Cable said CBS is asking for a 600 percent premium above what it pays CBS in other areas of the country, which it called "unprecedented" and "unreasonable."

Threats of blackouts have become increasingly common in the TV business as networks, which provide programming, and cable operators, which transmit that content into living rooms around the country, battle over terms in contentious negotiations.

A source close to CBS said the companies' agreement expired in June after they had been in talks for months. The source declined to be identified because the talks are not public.

The deal was extended until July 24 at 5 p.m. EST so that the stations could stay on the air while the companies negotiated.

The dispute would only affect Time Warner Cable customers in three metropolitan areas who receive the CBS-owned stations WCBS-TV and WLNY in New York, KCBS-TV and KCAL-TV in Los Angeles and KTVT-TV and KTXA-TV in the Dallas.

Time Warner Cable is the second-largest U.S. cable provider with about 12 million customers.

Retransmission consent fees are a major revenue stream for CBS which has said it is on track to generate $1 billion in payments by 2017.

CBS set up a website "KeepCBS.com" featuring links that let customers contact Time Warner Cable with their concerns.

The companies announced their last deal in January 2009.

(Reporting by Liana B. Baker; Editing by Richard Chang)