Does CBS Have The Upper Hand In Its Battle With Time Warner Cable?

Most Wall Streeters seem to think that CBS will prevail in its effort to extract a big price increase from Time Warner Cable when they ultimately resolve their retransmission consent dispute. The fight involves CBS-owned stations that reach some 3.5M TWC homes, primarily in New York, Los Angeles and Dallas. But with the companies still at an impasse, CBS could go dark in the key TWC systems this Wednesday when their current carriage deal expires. Cable and satellite companies tend to blink first in retransmission disputes. As the No. 1 broadcast network, CBS is an unusually formidable adversary. Time also may be on CBS’ side: The football season begins in September and that must-have programming could “force a solution,” RBC Capital Markets’ David Bank says. Meanwhile, TWC could be distracted by a takeover battle. (Charter Communications, with support from its largest investor Liberty Media’s John Malone, reportedly is working with Goldman Sachs on a bid.) Bank believes that CBS ultimately wants to collect $2 per month for each TWC customer its stations reach, probably a 100% increase vs the current deal. Even so, “We have to side with CBS on this one,” says Wells Fargo Securities’ Marci Ryvicker. (more…)

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