Small Retrans Disputes Begin to Heat Up as Year Ends
Some small retransmission consent disputes around the country are beginning to heat up as TV stations and distributors fail to reach new deals. Dish Network called out Heritage Broadcasting for ending talks this week over carriage of WFQF-TV and WWTV-TV Traverse City, Mich. And the American TV Alliance criticized Cordillera Broadcasting’s negotiating position against Time Warner Cable in Corpus Christi, Texas.
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Many more retransmission consent deals remain to be resolved, said Mike Ruggiero, chairman of ATV Broadcasting, which handles carriage deals for 160 TV stations. “We have hundreds that we've done and hundreds still to do,” he said. “I don’t think it’s as contentious as some people thought it might be, but then again, we haven’t really gotten down to the wire with some of these deals,” he said. Exacerbating the situation is the involvement of the broadcast networks who are seeking increases from affiliates in the form of reverse network compensation, Ruggiero said. “I try to tell the cable operators not to pick on the broadcasters because we're kind of in the same boat this year."
As that wire approaches, the rhetoric on both sides has intensified. “We are working hard to reach a middle ground with DISH but DISH continues to dictate the terms of any settlement,” Heritage Broadcasting told visitors to its website Thursday. “In the meantime, we suggest that all DISH subscribers request a discount on your monthly bill” while Heritage’s stations aren’t carried. Dish laid the blame on Heritage. “Their offer would be like demanding $15 for a gallon of milk, and then saying it’s only pennies more per sip,” said Dave Shull, president of programming for Dish. Dish said it has reached several other deals with broadcasters that were “reasonable about the terms of carriage."
In Corpus Christi, Cordillera blamed TWC for not carrying four of its stations there. “Time Warner does not want to pay fair value for our programming,” it said on the website for KRIS-TV Corpus Christi. “Like any business, KRIS-TV cannot afford to sell its valuable content at levels far below market value. The ATVA said the Cordillera “blackout” highlights the need for changes to the broadcast carriage rules.
Meanwhile, the American Cable Association pointed to the new NFL licensing agreements with three of the major broadcast networks as an area ripe for regulators’ attention. The Wall Street Journal reported the deals reflect a 63 percent increase in the fees due to the league. “The fact is that these outrageous sports rights fees will be thrust upon the nine out of 10 U.S. households that subscribe to cable and satellite services and are denied any opportunity to opt out of paying for the channels on which these NFL games will appear,” said Matt Polka, the ACA’s president.
Sports deals like the one with the NFL are among the only reasons broadcast stations can seek the retransmission consent fees they do, said Roger Noll, professor emeritus at Stanford University. “The dominance of traditional over-the-air TV networks has been pretty much eliminated with respect to everything except professional team sports,” he said. NFL games are one of the few types of programming not duplicated by other pay-TV networks. “Almost all forms of program content are now available from a large number of sources,” he said. “That’s not true of football because the NFL, by allocating the rights the way it does, makes it be a product for which there is no substitution,” he said.