http://www.wvgazette.com/section/News/Today/2006070628?pt=0

Broadcast dispute might go to court

By Joe Morris
Staff writer 

Negotiations to keep Charleston's ABC and Fox stations on cable television
are nowhere near resolution and could end up in court.

The company that broadcasts WCHS-TV and WVAH-TV, Sinclair Broadcast Group
Inc., is threatening to pull the stations from the area's cable system if it
can't reach a retransmission agreement with cable provider Suddenlink
Communications. 

Sinclair already pulled the two stations from the Beckley market on Monday,
according to Suddenlink. 

Sinclair is asking for an upfront payment of about $40 million from
Suddenlink, plus annual fees of $2.4 million. That would force Suddenlink to
charge each of its 240,000 subscribers in Charleston, Parkersburg and
Beckley a $200 flat fee, plus $1 a month, the company says.

Suddenlink calls those charges "unprecedented."

"If that were to happen, cable customers across the country could expect to
see their cable bills double or triple," said Pete Abel, Suddenlink's vice
president for corporate communications.

Suddenlink has responded by offering Sinclair a package of ad discounts and
video-on-demand rights equal to about $1.5 million. Sinclair first rejected
the offer and then asked for more details, which Suddenlink is now
compiling, Abel said.

At first, Suddenlink contended that it should get the broadcast rights free
- just as its predecessor in the West Virginia cable market, Charter
Communications, did.

Earlier this week Suddenlink filed a complaint with the Federal
Communications Commission to block Sinclair from yanking the two stations,
saying that the broadcaster has failed to negotiate in good faith as
required by law. It wants the agency to issue an order letting it continue
carrying the stations through Dec. 31, 2008, at the terms set with Charter
previously.

Before Suddenlink's deal with Charter closed on July 1, Sinclair was asking
for an upfront payment of just $4 million, according to Suddenlink's
complaint. Shortly afterward, its price shot up to $40 million. Abel calls
that a clear case of bad-faith negotiating.

According to Barry Faber, Sinclair's vice president and general counsel,
Sinclair decided to raise the price because Charter had warned it that the
lack of a retransmission agreement could sink the deal. That was a signal
that the broadcast rights were worth more than Sinclair realized, Faber
said.

Sinclair's asking price is indeed steep for the cable industry. It's equal
to what Charter customers now pay annually for 75 analog channels.

But Sinclair says the market for broadcast programming is getting crowded
with providers like satellite and telephone companies. Consequently, it has
more bargaining power than it did in the past.

"Pricing is an ongoing and evolving process," said Faber, Sinclair's vice
president and general counsel. Cable providers have gotten broadcast
programming free in the past because there weren't any alternative carriers.
"It was essentially a monopoly," he said. Today, on the other hand, "it's
not as detrimental [for Sinclair] to be off the [cable] system."

Sinclair's high ratings also make the programming more valuable, Faber said.

WCHS and WVAH combined have better ratings than the top 10 cable channels,
he said. 

"It's a completely reasonable demand," he said. 

Suddenlink also is considering taking "additional legal actions," according
to a company press release, but Abel would not elaborate on what that might
entail.

Negotiators from both sides are in contact every one to two days, Able said.
Under FCC rules, Sinclair can't pull its stations from the Charleston and
Parkersburg markets until July 26, at the end of the summer "sweeps" rating
period.

To contact staff writer Joe Morris, use e-mail or call 348-5179.

Gregory S. Williams
[EMAIL PROTECTED]



Reply with a "Thank you" if you liked this post.
_____________________________

MEDIANEWS mailing list
[email protected]
To unsubscribe send an email to:
[EMAIL PROTECTED]

Reply via email to