Time Warner Cable and CBS are nearing the end of a big showdown over a new distribution contract. At stake? A potential blackout of CBS in Los Angeles, New York and several other cities around the country. It's the latest dispute over the rising cost of television programming, and how much of it gets passed on to consumers. Late Wednesday night, the two sides agreed to extend their current deal until Monday.
Both sides have been using the airwaves to make their case. Time Warner complains the fee CBS charges for retransmitting its shows is too steep. CBS counters its programming costs more. Wonder why? Check out its contract with pro sports leagues.
"The sports costs are being built into the cost of programming, and that's one of things that is still considered a live product for advertisers and it's still very attractive for broadcasters and cable operators," says Justin Nielson, an analyst for SNL Kagan.
The rub is, sports cost cable subscribers more whether they're watching football or not.
"Sports are roughly 17 percent of viewership and account for about half of the cost of a cable bundle," says industry analyst Craig Moffett.
And Moffett adds the cost of sports programming is going up faster than everything else. Bottom line for cable subscribers: get used to the ad wars.
“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VABEFORE YOU GO