Cable Ones Might: Nexstars Not Winning
By Linda Moss
MultiChannel News
8/3/2005 12:05:00 AM
http://www.multichannel.com/article/CA631737.html
San Diego -- Cable One Inc.s top official claimed Tuesday that the
broadcaster that pulled its TV stations off his systems seven months ago
has been badly bloodied in the battle, suffering ratings declines of up to
40% and seeing its stock price tumble.
Im going to show you the scorecard today, CEO Tom Might told members of
the National Cable Television Cooperative at their meeting here, referring
to the impact of his companys ongoing retransmission-consent battle with
Nexstar Broadcast Group Inc.
During a luncheon address, Might for the first time talked about the
subscriber losses his systems have endured and what has happened to the
broadcasters dropped stations in Joplin, Mo., and Texarkana, Texas.
Comparing the dispute to a three-ring circus, he claimed that Nexstar has
been hurt worse than Cable One.
Ive decided that yes, weve had losses, but they are so small compared to
what Nexstar has lost that it is to our advantage as Cable One -- and even
the industrys advantage -- that we be public about what losses we have
had, Might said. You will be amazed at the difference
It says bluntly
broadcasters need us more than we need them. We now have the facts to prove
it.
Both Cable One and Cox Communications Inc. had stations pulled by Nexstar
Jan. 1 when they refused the broadcasters demands for cash for carriage.
In both Joplin and Texarkana, Cable One lost about 7% of its basic
subscribers after deleting the Nexstar stations, not the 20% the
broadcaster was claiming, Might said. For example, in Joplin, the cable
operators distribution of 40,000 went down to 38,500, according to Might.
But Cable One made up for more than one-half of that loss by signing up
high-speed-data customers, so the drop in basic and high-speed subscribers
combined was 3.7%, he added. In Texarkana, when Cable Ones basic and
high-speed homes are combined, it saw a 4.6% drop in those customers,
according to Might.
In comparison, ratings at Nexstars affected stations -- those dropped by
Cable One -- have seen double-digit decreases. Total-day ratings for
Nexstars three stations dropped 29%-40% from last November to May,
according to Nielsen Media Research data cited by Might.
Yet even though that viewership is down, top Nexstar officials such as CEO
Perry Sook have been telling Wall Street that they havent lost audience,
Might said, citing quotes from those officials.
I think this is called an untruth, he added. I dont want to go further
than that. I dont want to be quoted. But [Sook] said this to the financial
community.
Might maintained that while Cable One had essentially been providing
29%-40% of Nexstars viewership at the affected stations, Nexstar was only
giving the systems a 7% lift in their video-subscriber count.
What greedy fool would want to end this 50-year relationship that has
worked so well for both parties? he added. How are they going to make up
the revenue losses? There is no way. They are in a very inferior business
situation compared to cable
We know we make a lot of money on high-speed
data. It doesnt bother me at all to trade off a video subscriber for a
high-speed-data subscriber.
Nexstars stock is now trading at abut $5 per share, Might said, far below
its high of about $14. Nexstar is either desperate or nuts, or both, he
added. Why would you jump from a wire without a net underneath you?
TV-station owners that say they want to get paid for their programming,
like ESPN, should then give cable operators the same things cable networks
do, according to Might.
Fair enough: If youll treat us like they treat us, well pay for your
content, he added. But heres how they treat us. Stop the free
distribution over the air. Take your antenna down. Offer us two minutes of
avails on every hour. Give up the government-opposed retransmission and
must-carry. Come to the table. Let the marketplace decide who gets carried
or not. Be our partner, not our enemy
They want to be treated like a
cable network: Act like one.
Citing the steep decline in audience share that broadcast has suffered,
Might added, This is not our problem. Stop taking it out on us and our
subscribers. Its the cable network that you want to go punch in the eye.
We didnt take your advertising. We didnt take your market share. They did.
Cable One has offered broadcasters many different kinds of noncash
compensation, such as buying advertising on their stations and carrying
their local digital signals, such as local weather channels, according to
Might.
Our philosophy is that we did a lot of retrans deals for a lot of years,
and we have a lot of good broadcast partners out there, he added. There
should be a mutual benefit in the relationship. It shouldnt be a one-way
street.
Fielding a question from the audience, Might acknowledged that his sister
company, broadcaster Post-Newsweek Stations Inc., is seeking cash for
retransmission consent. Cable One and Post-Newsweek are owned by The
Washington Post Co.
Explaining that the parent company is very decentralized, Might said, My
counterpart who runs the broadcast division of our company is one of the
ringleaders on the other side, unfortunately
Our parent company lets us
each do whatever we want running our companies to maximize our results.
Might then flashed a slide that included addresses, phone numbers and
e-mails for Alan Frank, president of Post-Newsweek Stations, and Washington
Post CEO Don Graham, suggesting that NCTC members contact both of those
executives directly to complain about cash for carriage.
Tell [Frank] to pick on someone his own size, Might said. Tell him to
pick on Comcast [Corp.].
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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