CBS chief slams Time Warner Cable, calls offer a 'gesture'

Tue Aug 6, 2013 3:39pm EDT

CBS chief executive officer Les Moonves arrives at the premiere of CBS Film's ''Extraordinary Measures'' at Grauman's Chinese Theatre in Hollywood, California, January 19, 2010. REUTERS/Danny Moloshok

CBS chief executive officer Les Moonves arrives at the premiere of CBS Film's ''Extraordinary Measures'' at Grauman's Chinese Theatre in Hollywood, California, January 19, 2010.

Credit: Reuters/Danny Moloshok

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(Reuters) - CBS Corp Chief Executive Leslie Moonves on Tuesday rejected the latest proposal by Time Warner Cable Inc to end its blackout of the network and dismissed the cable company's offer as a "public relations gesture."

Even though both sides urged each other to return to the negotiating table, talks seemed to have broken down, affecting more than 3 million Time Warner Cable customers in New York, Los Angeles and Dallas.

In a three-page letter released to the media on Tuesday, Moonves said Time Warner Cable has not reached out to him in any meaningful way to resolve the dispute.

On Monday, Time Warner Cable CEO Glenn Britt made a proposal to Moonves in a letter that he also released to the media, but Moonves said it was not a "sincere offer.

Time Warner Cable blacked out CBS-owned stations and cable networks on Time Warner Cable's systems in two of the largest U.S. markets, New York and Los Angeles, last Friday. The CBS.com website was also affected.

It has deprived viewers of summer sci-fi hit "Under the Dome" and live sports, such as golf, that air on the broadcast network.

In New York, the fracas caught the attention of mayoral candidates, including city Comptroller John Liu. He issued a letter to Mayor Michael Bloomberg on Monday asking for an emergency meeting to discuss penalties against Time Warner Cable, including a possible termination of its franchise agreement and a fine levied each day a cable channel is dark.

The city of New York declined to intervene. Rahul Merchant, the city's chief information and innovation officer, said in a statement it would be inappropriate for the city to take a side in a dispute between two private companies.

Merchant urged both sides to resolve the dispute as soon as possible, and said the city will exercise its authority to make sure cable customers who cancel their service receive refunds.

Charlie Ergen, chairman of rival satellite provider Dish Network Corp, predicted the blackout would lead to a decline in CBS viewership and more "cord cutting" by customers who drop their pay TV service.

"They will watch some other shows because they will realize they don't miss it or they discovered new programming that they didn't know existed before, or they went to the Internet and cut the cord and never came back" Ergen said on a conference call after his company reported quarterly results.

Dish has frequently taken channels off the air to gain leverage in fee battles. Last Thursday, broadcaster Raycom Media was blocked from Dish's system in a dispute that remains unresolved.

CBS said it expected minimal impact to its nationwide ratings from the standoff with Time Warner Cable. Through the first four nights, it estimated a 1 percent decline in viewership due to the blackout.

Moonves also said the cable company's offer on Monday to sell CBS channels to subscribers one-by-one on an "a la carte" basis an "empty gesture" and unrealistic and countered the cable company to offer its pricy regional sports network channels in the same manner.

In response to Moonves' letter, a Time Warner Cable spokesman said: "We're disappointed that they've offered no solutions; we've offered two. Our offer was sincere, and they still haven't addressed the blocking of CBS.com."

On Monday, Time Warner Cable rival Verizon FiOS said it was receiving requests for service from Time Warner Cable customers who could not watch CBS.

Shares of CBS edged down 0.1 percent to $53.91, while Time Warner Cable fell 2.1 percent to $113.97 on the New York Stock Exchange.

(Reporting by Liana B. Baker in New York and Lisa Richwine in Los Angeles; Editing by Lisa Von Ahn and Richard Chang)

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