Time Warner Cable extends agreement with Sinclair

AP News
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Posted: Dec 08, 2009 2:37 PM

Time Warner Cable Inc., the nation's second largest cable operator, has entered into two agreements with broadcast station owners for the right to retransmit their stations' TV signals.

On Tuesday, Time Warner Cable entered into a four-year retransmission consent agreement with Local TV LLC covering stations in Kansas City, Mo., Greensboro, N.C., Milwaukee, Cleveland and other cities.

On Monday, the cable operator extended its retransmission agreement by one year with Sinclair Broadcast Group Inc.

Sinclair's contract would have expired at the end of the year. The extension means Time Warner Cable subscribers will be able to watch Sinclair's stations without interruption over the next year as both sides continue negotiating over retransmission fees.

Other terms of both deals were not disclosed.

Suffering under an advertising downturn, TV stations increasingly have been asking for retransmission fees from cable and satellite TV operators and phone companies that offer TV service. These companies are required to get the TV stations' consent to retransmit signals over their systems so viewers can watch local channels over cable.

Historically, TV stations whose owners also own cable channels have allowed retransmission in exchange for carriage of cable channels on a cable or satellite TV system. Payment of fees in cash has been a growing practice in recent years.

Sinclair's TV stations include Fox affiliates in San Antonio; Columbus and Dayton, Ohio; and in Buffalo, Syracuse and Rochester, N.Y. It also owns a CBS affiliate in Portland, Maine; ABC affiliates in Greensboro, N.C. and in Columbus and Dayton, Ohio; among others.

Separately, Time Warner Cable is issuing two tranches of debt totaling $2 billion maturing in 2015 and 2020. Net proceeds will be used to repay other borrowings and for general corporate purposes. Barclays Capital Inc., Deutsche Bank Securities Inc. and Goldman, Sachs & Co. are the book-running managers.

Moody's Investors Service gave the new debt an investment-grade rating of "Baa2."

Time Warner Cable, based in New York, serves more than 14 million customers clustered in New York, the Carolinas, Ohio, southern California and Texas. Its shares were up 16 cents to $43.21 in afternoon trading. Sinclair, based in Hunt Valley, Md., was up 10 cents to $3.69.