As CBS and Dish Network continue to fight it out on the retransmission consent front, Telsey Advisory Group media analyst Tom Eagan noted that the broadcaster may have less leverage in its next big carriage renewal with Charter Communications.
CBS stations went dark to Dish Network subscribers on Nov. 20, after the two could not reach a retransmission consent agreement. CBS has claimed that Dish has refused to negotiate in the deal and Dish alleges that it offered to extend the current pact while it continues negotiations, but CBS declined.
Some analysts have noted that CBS has considerable leverage in the negotiations because of its National Football League carriage contract. Even though TV ratings are down for the NFL this year, in a note to clients Eagan wrote that “it is still programming that can drive households to change their video provider.”
Related: Despite Ratings Issues, NFL Ad Revenue Up in September
While Dish is promoting the use of antennas to capture CBS’s signal over the air, and could encourage customers to subscribe to CBS’s over-the-top offering CBS All Access, it could backfire in making those users full OTT customers, Eagan wrote.
In a statement CBS said its stations haven’t gone dark with a pay TV provider since 2014, coincidentally with Dish. The broadcaster said it obviously wants to strike a fair deal as soon as possible, but the parties “remain far apart on terms.”
“In the meantime, we continue to stand ready to negotiate a fair deal with Dish,” the broadcaster continued.
But the analyst is even more concerned about an upcoming retrans negotiation for CBS. Because of the settlement of a lawsuit earlier this year centered on rates paid by legacy Charter systems and newly acquired Time Warner Cable systems, CBS had the expiration date of its carriage deal with Charter pushed to April 1, 2018 from Dec. 31, 2017. And those extra months could make a world of difference.
Eagan wrote that CBS was able to keep the higher legacy Time Warner Cable rate, but in moving the retrans date loses its NFL leverage. While CBS also has the March Madness NCAA basketball tournament around that time, coverage of that event is split with TBS. According to Eagan, TBS and CBS will share the first and second rounds and the regional semi-finals and finals of the tournament, but TBS will cover the Final Four and the National Championship Game in April alone.
While that would seem to put the ball squarely in Charter’s court, Eagan added that most legacy TWC executives at the company should remember the last time CBS and Time Warner Cable engaged in a retrans scuffle. That was way back in 2013, where CBS went dark for one month during the summer in key TWC markets, resulting in the greatest third quarter video subscriber losses in the cable operator's history – 306,000 homes. For many, that decline was one of the triggers for Charter to launch its takeover bid for the company.
“This is an important renewal,” Eagan wrote.
