• by Wayne Friedman , January 11, 2010

Sinclair Broadcast Group's president/CEO David Smith says a more "free market" is finally helping out TV stations, while shifting more of a burden on some low-rated cable networks.

In a letter to Sen. John Kerry (D-Mass.), Smith said: "The promise of the 1992 retransmission consent legislation -- that broadcasters would receive fair compensation -- has yet to be fully realized, but we believe the free market is finally beginning to move in that direction."

He added: "The recent success of Fox in receiving compensation from Time Warner Cable for its highly rated stations, coupled with the decision by Cablevision [Systems Corp.] to remove The Food Network and HGTV from its lineup, rather than pay exorbitant price increases for these low-rated programming services, reflect a movement toward a resetting of program acquisition fees consistent with consumer demand."

Smith was writing in response to its recently concluded, somewhat bitter retransmission negotiations between Sinclair and cable systems owner Mediacom. Kerry, as the head of the Senate Internet committee, has been vocal that both broadcasters and cable networks quickly negotiate their deals to avoid leaving the TV viewing public in a lurch.

Kerry had put pressure on Time Warner and Fox to resolve their differences so sports fans would not miss the highly watched Bowl Championship Series scheduled in early January. Kerry also indicated that he wants to meet with parties over problematic retransmission fee deals. Smith said Sinclair would agree to do that.

While its deal with Mediacom has been completed, Smith has no problem questioning Mediacom's actions.

"Mediacom's argument essentially boils down to a self-serving claim that because local broadcast stations are free over-the-air, this should give a private, for-profit company like Mediacom a special right to use this programming without paying an appropriate fee to do so."

"Were this the case, video bootleggers could simply record popular broadcast programming over-the-air onto DVDs and sell boxed sets of the entire season at prices far below the selling price of those who actually pay to acquire the valuable rights to sell such programming."

"Although Sinclair is pleased to have reached agreement with Mediacom, [it] clings to the past practice of underpaying for its most important revenue generating assets..." Sinclair and Mediacom struck a one-year agreement; terms were not disclosed.

Baltimore, Maryland-based Sinclair Broadcast Group operates 58 TV stations in 35 markets, covering about 22% of U.S. television homes.