8.5 Million Could Lose Local TV in Dispute
NEW YORK (CNNMoney) -- When the clock strikes midnight Friday, a standoff between Time Warner Cable and Sinclair Broadcasting Group could result in a blackout of 33 local TV stations in as many as 8.5 million homes across the country.
Among the major markets possibly affected are San Antonio, Pittsburgh and Tampa, Fla.
In what has become a dubious annual New Year's tradition, a cable or satellite provider and a broadcaster are once again playing a game of chicken over so-called retransmission fees, with the threat of cutting off service to customers in the balance. Retransmission fees are the amount that cable providers pay networks for the right to air their content.
In this latest round, Sinclair (SBGI), which owns local ABC, CBS, CW, Fox, My Network and NBC affiliates in 35 markets, claims it wants to raise its retransmission fees by 10 cents per user.
With 8.5 million homes at stake, according to Sinclair, that's an increased cost of roughly $850,000 for Time Warner Cable.
The cable company disputes Sinclair's figures, saying the number of customers affected is closer to 4 million.
Even so, Time Warner Cable (TWC, Fortune 500) has balked at the offer, according to Sinclair. Their current contract expires at midnight.
"With such a small increase we suspect that most of our loyal viewers would prefer that Time Warner Cable, which recently announced a fee increase of $3 per month in at least one market, stop acting on its threat to 'Get Tough,'" said Barry Faber, Sinclair's general counsel, in a prepared statement.
Faber said other cable providers have accepted similar offers from Sinclair. But Time Warner Cable argued that its offer to Sinclair is "as favorable as deals Time Warner Cable has negotiated with other station owners."
Though the local stations will be blacked out if no agreement is reached, the cable company worked out deals with the national networks themselves to continue to air programming throughout the length of the dispute. That means local news and programming would not air, but network shows like "Glee" and "Desperate Housewives" would.
"We want our customers to remember that we're fighting hard to contain the rising costs of broadcast programming," said Rob Marcus, president of Time Warner Cable, in a statement.
The battles between cable or satellite providers and networks have intensified in the past several years, as broadcast networks have increasingly demanded retransmission fees on par with what cable stations charge. The networks argue that more people watch their content than cable channels, but cable providers have typically countered that broadcast networks' content is available for free over the air.
Many of the disputes have resulted in blackouts or high-stakes games of chicken in which one party threatens to prevent a customer base from watching a much-watched program. This year, TV customers have missed out on the Academy Awards, the World Series and NFL football due to retransmission battles
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