CBS signs Verizon deal, no Time Warner Cable progress

Reuters News
Posted: Aug 22, 2013 8:54 AM

By Liana B. Baker

(Reuters) - Verizon Communications Inc reached an agreement to carry CBS Corp television programming while cable rival Time Warner Cable Inc's blackout of CBS stretched into nearly its third week in New York, Los Angeles and Dallas.

CBS' chief executive Leslie Moonves told employees in a memo on Thursday that the same terms of Verizon's deal were also offered to Time Warner Cable.

"You should know that Time Warner Cable has been offered almost exactly the same deal for CBS carriage to which Verizon has agreed," Moonves said in the memo seen by Reuters.

However, leading cable companies such as Time Warner Cable and Comcast usually receive more favorable terms than newer TV services such as Verizon because they have been around longer and have more subscribers.

Verizon on Thursday said it agreed to continued retransmission of CBS stations and wider distribution of CBS Sports network on its FiOS TV service in multiple markets around the country. Their previous agreement was not due to expire until the end of year, Verizon spokesman Bill Kula said.

Both companies did not disclose how much the deal is worth but typically analysts estimate a deal with a TV provider with 5 million subscribers can be worth upwards of $100 million.

Moonves expressed frustration in the memo over the fruitless negotiations with Time Warner Cable, although he did say that both sides will "keep talking."

"I cannot describe to you the frustration I feel at the way these negotiations have gone. Never in my most pessimistic moments did I ever think that they would have lasted this long and have been so difficult," Moonves said.

Moonves added that the Time Warner Cable is "demanding different terms than any other company in the business" and said he was "mystified by what appears to be a lack of urgency" on Time Warner Cable's part to resolve the matter.

Time Warner Cable declined to comment on Moonves' remarks.

Verizon, which competes fiercely with Time Warner Cable in New York, has said that it has signed on customers frustrated by the CBS blackout, which started August 2 after the companies failed to agree on distribution terms.

Time Warner Cable Inc will lift a blackout of the local CBS station in New York briefly on Thursday so subscribers can watch a candidate debate in the New York City Comptroller race.

If the blackout continues, the company will also broadcast the Republican mayoral candidates debate on August 28 and the Democratic mayoral debate on September 23. But subscribers will still be unable to watch any regular CBS shows.

Most analysts expect the two parties to reach a deal by the time the National Football League season kicks off in September.

(Reporting by Liana B. Baker and Sinead Carew in New York; Editing by Gerald E. McCormick and Tim Dobbyn)