Comcast-Time Warner Cable Deal Seen Affecting Retrans Consent if Approved, Say Cable Experts
The proposed Comcast/Time Warner Cable merger could have an impact on retransmission consent negotiation deals if approved, some cable experts said. After divesting 3 million subscribers, leaving a combined Comcast-TWC entity with about 30 million subscribers, Comcast could have leverage in deals with national cable networks, a cable attorney said. Small and mid-sized multichannel video programming distributors may face higher retrans consent fees, if Comcast ends up paying a smaller fee to broadcasters, a cable executive said. Comcast proposed acquiring the cable company last week (CD Feb 14 p1).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Some scenarios would be beneficial to a combined Comcast and Time Warner Cable, said Robert Gessner, president of Massillon Cable TV. Raycom and Sinclair have coordinated their retrans negotiations “to minimize the harmful impact of impasses so that Comcast retrans deals and Time Warner retrans deals don’t take place in the same year,” he said. “To the extent that they're pushed together, I think they have significantly more leverage.” If the companies can consolidate their control over a region for an individual broadcaster or station and merge together as one operator, that creates greater leverage, he added.
There would be a benefit for broadcasters, said Bruce Beckner, a Garvey Schubert cable attorney. “On the broadcaster side, what is useful is if a multiple [broadcast] station owner’s footprint covers most of a cable MSO’s footprint,” he said. The broadcaster can leverage carriage of its “minor” stations and channel positions as part of the price of carrying its major network stations, he said. “Under other circumstances, the minor stations would have to elect must-carry and, on their own, wouldn’t be attractive enough for a cable operator to buy if they elected retransmission consent.”
In the long run, broadcasters still have the final say, said Gessner. During impasses, some broadcasters will likely take the most egregious action they can, he said. They can cut off streaming access to their content, withdraw the signal, bring political allies to bear and use major TV events to increase their leverage, he said. “The cable operator says, if I want to be a full service provider, I need that content. … So they end up paying what the broadcaster demands."
Having a large subscriber number isn’t particularly useful in negotiating with broadcasters, because retransmission consent is all local, Beckner said. The real leverage for having a bigger geographic footprint and more subs is in negotiations with national cable networks, he said: “For example, a merged Comcast and Time Warner are going to put most of the New York metro and L.A. metro areas under the same ownership.” A cable network with national aspirations is going to want carriage in those top two markets, he said.
Gessner said an approved deal could be worrisome for small and mid-sized MVPDs. “There are broadcast and non-broadcast content owners that have revenue targets they want to hit,” he said. “To the extent that Comcast gets a better rate, it means that everybody else will pay more.”