Sinclair and Time Warner have been in a standoff over carriage fees, the money network TV providers like Sinclair charge for the right to carry their stations. Sinclair made an offer to Time Warner in December, which was met with silence from the cable system.
Time Warner, the second largest cable operator in the U.S., does not operate in Maryland but has 14.4 million customers in 28 states.
BTIG Research analyst Richard Greenfield said Monday he felt Sinclair was in a weak negotiating position because the kinds of stations it carries were ones many customers could probably live without.
“With FOX programming protected (via a separate direct negotiation with FOX), CW/MyNetwork programming largely irrelevant (and certainly not worth switching multichannel providers over), and NFL local games not terribly impacted, we expected Time Warner to allow Sinclair’s broadcast stations to go dark for an extended period of time – with about 1.1-1.2 mm TWC subscribers impacted (less than 10% of TWC’s sub base).”
Greenfield said Sinclair is well aware of its weakened position and must have blinked when it announced Dec. 31 that a short-term extension (14 days) had been reached with Time Warner. The deal extended a Dec. 31 deadline that would have seen Sinclair’s stations pulled from the system.
“[We] believe Sinclair must have realized it did not have much leverage over Time Warner Cable as Sinclair’s leverage would appear to drop significantly two weeks from now. In turn, we expect terms of TWC’s retrans deal with Sinclair to be notably better (less expensive ) than the deals it has done with owned and operated (O&O) station groups over the past year.”
For its part, Sinclair said the deal shows how important its stations are to the cable system’s customers.
“We are pleased [Time Warner] recognized the importance of providing their subscribers with access to the valuable and popular programming, such as the local news, sports and syndicated programs, our stations carry and, therefore, agreed to this extension. We intend to continue our good faith negotiations during this period with the intent of finalizing a longer-term agreement at pricing that reflects the higher cost of programming we are faced with today.”