Time Warner Cable Rejects Sinclair Proposal, Could See Blackout at Year End


In a move that could lead to a blackout of some stations after midnight on Dec. 31, Time Warner Cable (NYSE:TWC) has rejected a proposal from Sinclair (NASDAQ:SBGI) to increase subscribers’ monthly bills by ten cents.

Sinclair said Tuesday Time Warner rejected and refused to provide a financial counterproposal to its offer, which, it said, effectively ended the negotiations. As a result, Sinclair has threatened to pull its stations from Time Warner systems after midnight on Friday.

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"We simply do not understand why Time Warner insists on being treated better than its competition," said Barry Faber, Sinclair's executive vice president and general counsel.Faber went on to note that it is “particularly troubling” that Time Warner would “deprive its subscribers of the extremely popular programming broadcast” by Sinclair stations.

Time Warner Cable, however, says Sinclair's statement is false. In an emailed statement Tuesday, company spokesman Alex Dudley said Time Warner has "at no time told Sinclair that we were terminating negotiations."

Dudley said Sinclair has presented the company with three possible solutions, including arbitration for Sinclair's Big 4 stations.

"We remain open and willing to negotiate a reasonable agreement for our customers and have no intention of declaring negotiations to be at an end even in the event that Sinclair decides to pull their signals from Time Warner Cable on December 31st," he said.

Sinclair, which said the increase is necessary to keep up with rapidly increasing programming costs, offered to guarantee that the price being paid by Time Warner would be equal to or less than the price agreed to by every other major cable and satellite provider in deals reached over the last two years.

The protection would cover Time Warner's primary competitors, including DirecTV (NYSE:DTV) and Dish Network (NASDAQ:DISH), as well as the agreement reached earlier this year with Charter and one that closed with Mediacom last week.

The expiring agreement relates to carriage of 33 television stations received by more than 8.5 million of what Time Warner Cable refers to as primary service units, Sinclair said in a statement.

The latest dispute follows a slew of disagreements between cable providers and broadcast stations over fees. Earlier this year, Cablevision (NYSE:CVC) customers went without FOX programming for 15 days, including through two World Series games.

In the event of a blackout with Sinclair, Time Warner cemented a clause in its programming deal with News Corp. (NASDAQ:NEWS) that provides its subscribers continued access to FOX content, including prime-time shows.

News Corp. is the parent company of FOX Business.

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