TWC, Sinclair Battle For Retrans Turf

For broadcasters, the dollars coming from pay-TV distributors to carry their programming is becoming a narcotic and in danger of impairing judgment. There is a turf war emerging; it's marked by greed and threatens to derail an ecosystem that could have a long-lasting impact on the business.

A current dispute between the Sinclair station group and Time Warner Cable crystallizes some of the avarice. Sinclair and TWC are fighting for every penny to get the best deal for themselves.

The deadline is Jan. 1. If no deal is struck, 33 Sinclair stations will be blacked out on TWC's systems in 21 markets.

That fits the template for the growing number of contentious disputes over how much cable/satellite/telco TV operators will pay broadcasters "retransmission consent" payments to offer their stations.

Sinclair and TWC are slinging elbows and mud. And it appeared to be the common straight-up standoff -- until word emerged that Fox is setting a dangerous precedent, acting as a two-timer.

Rocky relationship or not, Fox and Sinclair are longtime partners in the traditional network-affiliate partnership. Among the stations potentially off the air on TWC are 11 stations with the Fox network, located in markets such as Pittsburgh, Columbus and San Antonio.

It would seem Fox would then fervently back Sinclair. After all, it will get a portion of the money Sinclair gets from TWC. And the more Sinclair gets, the more Fox gets.

Yet at the same time, Fox is cutting some of the legs out of its partner. Much of Sinclair's leverage vis-à-vis TWC comes from an argument that if TWC forces Fox off the air, consumers would be deprived of "American Idol," "Glee" and maybe even the Super Bowl.

But Fox has a side agreement with TWC. If the Sinclair stations go dark, TWC can keep offering Fox programming on its systems in the affected markets.

That protects Fox on several fronts. It would buttress it against losing some -- though not a huge amount -- of advertising revenue nationally. It would collect money from TWC by making its programming available. In the short term, Fox stands to win no matter what happens in the Sinclair-TWC battle.

But longer term, leaders at other station groups gearing up for a retrans fight with TWC have to be apoplectic if the Fox-TWC deal covers more than the Sinclair matter.

"The affiliates are not happy with this reported deal," says Brian Brady, chair of the Fox affiliate board. "We're still trying to understand it. Until we really understand why and what the purpose was, we don't have a comment."

He said affiliates plan to discuss it with the network.

A Fox spokesman says the network doesn't want to "insert ourselves in the negotiations" between Time Warner Cable and Sinclair. But its TWC arrangement has three purposes: to protect consumers from losing signals; to allow Sinclair (in this case) to stay on the air and continue reaping ad revenue with no blackout; and urge the two sides to reach an agreement without deadline pressure.

The FCC is will begin exploring further regulation of potentially signal-pulling disputes, so Sinclair, TWC and Fox might have added incentive to reach a deal without service interruption.

If not, the government may save the three companies from themselves.

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1 comment about "TWC, Sinclair Battle For Retrans Turf".
  1. William Hughes from Arnold Aerospace , December 13, 2010 at 1:31 p.m.

    And WHO do you think will ending up bearing these extra Costs that will occur because of "Retransmission Fees"?

    2011 is going to be a good year for Cord Cutters!