The Time Warner Cable blackout could end up costing CBS a substantial amount of money.
Since the broadcaster is currently losing revenue from retransmission and advertising, UBS analyst John Janedis believes CBS stands to lose a whopping $400,000 per day. Since negotiations are stalled as of this writing, there’s currently no end in sight.
“Our view continues to be that consumers have more loyalty to the content rather than the company which is responsible for distribution and with contracts often running 5 plus years CBS can’t afford to take below market value given the inability to renegotiate terms,” Janedis explained in a research note.
He added, “If history is a guide, this should be resolved in less than two weeks.”
The struggle between Time Warner and CBS saw the broadcaster getting dropped from several major markets including New York, Los Angeles, and Dallas. This it the first time the network has been ditched by a cable provider.
Unfortunately, neither side appears to be backing down. The folks at CBS want the money they feel is fair while Time Warner believes the broadcaster is asking for too much cash. Although talks are at a standstill, some analysts believe everything will be resolved in time for the NFL season.
“There are no negotiations taking place at this time between CBS and Time Warner Cable. Before the deadline on Friday we asked TWC to continue the negotiation while our programming was still on the air in consideration for our viewers,” the broadcaster said in a recent statement.
It continued, “They rejected this request and told us that they’d have more leverage against us if they took us off their service. This is hardly a sign that they care about their customers as they claim. We remain ready to negotiate in good faith when they are.”
Although CBS claims to have the interest of their viewers at heart, the network has pulled online episodes of their shows from these markets. Since the decision affects everyone in these areas, the decision soon caught the attention of DirecTV. The company sided with their rivals in this situation.
“DirecTV has certainly had its share of these battles, so we applaud Time Warner Cable for fighting back against exorbitant programming cost increases,” the company recently explained.
What do you think about the battle between Time Warner and CBS?
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