No End In Sight For Scripps-Cablevision Spat; No HGTV, Food Either
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Licensing deals for some Scripps Networks Interactive (NYSE: SNI) channels ended at midnight New Year’s Eve for Time Warner Cable (NYSE: TWC) and Cablevision (NYSE: CVC). So why can Manhattan cable subs still see the Food Channel while their Long Island neighbors are blacked out? On the surface, it’s simple enough. Scripps and TWC agreed to keep talking and to keep Food and Great American Country live. Scripps and Cablevision stopped talking—and, in a first for the programmer, Scripps took Food and HGTV dark across the cable operator’s three million households. Since then, Scripps execs have said repeatedly they are willing to reopen discussions; Sunday evening, in a statement primarily aimed at placing the blame on Scripps, Cablevision said—sort of—that it was open to negotiations. That’s where it stops being simple.
The fact that Scripps and TWC are still talking and the lights are still on suggests that the gap between the increase that the programmer wants and the amount the distributor is willing to pay is narrow enough to cross. But Scripps says the 25 cents per sub per month that Cabelvision currently pays for both networks is already “substantially” lower than the amount paid for other top 10 cable nets separately—and less than Cablevision pays for some “less popular” networks from its own Rainbow Media. The programmer claims the “take-it-or-leave-it” CVC offer would leave the highly ranked Food Network near the bottom in pay. CVC says Scripps wants a more than 200 percent increase; neither is detailing the offer. The upshot: no room for movement, no extension.
Here are the statements each released Sunday evening so you can get the full taste:
Cablevision: Cablevision offered Scripps the ability to continue delivering HGTV and Food Network to our customers while we negotiated a new agreement. This is common practice in the cable industry, and such an extension occurred in the recent dispute between Time Warner (NYSE: TWX) Cable and the Fox Network, and in Scripps’ own negotiations with Time Warner Cable. But instead, with virtually no warning, Scripps took the extraordinary step of flipping a switch and removing its channels from Cablevision - effectively holding their own viewers hostage in order to pursue a more than 200 percent fee increase from Cablevision and our customers. The channels where HGTV and Food Network appeared on Cablevision remain available, and if Scripps really cared about their viewers Scripps could put their
programming back while we negotiate a new agreement. We believe it was irresponsible for Scripps to take the channels off, and it is irresponsible for them not to put the channels back on.”
Scripps’ response: Cablevision simply is not telling the truth. Scripps Networks Interactive has been trying to have productive negotiations with Cablevision for more than six months, but to no avail. Repeated requests to sit down together to discuss a fair market price for our networks have been rejected – even as recently as Sunday afternoon.
Cablevision is trying to characterize our rate increases as exorbitant and our negotiating strategies as unusual or unethical. Yet, every other cable and satellite provider in the country has willingly and professionally renegotiated a fair market rate for the rights to carry these popular networks. That’s why both networks can still be seen on every other cable, satellite and telecom system in the country except Cablevision. Under our current contracts, Cablevision pays us about 25 cents per subscriber for the combination of Food Network and HGTV. That combined rate is substantially lower than rates earned by other, individual top 10 cable networks and considerably less than rates Cablevision pays itself for less popular networks that it owns.
True, short-term contract extensions are often granted, but only when the two parties are engaged in productive negotiations and there has been substantive agreement between them. Cablevision’s offer was take-it-or-leave-it, and would still make Food Network – a Top 10 network – one of the lowest paid channels on its lineup.
We regret deeply the interruption of service for Cablevision customers who rely on us for quality programming, but we hope and trust that they understand that Cablevision can’t get something for nothing. Let’s be clear, we have been and remain ready and willing to negotiate. But until they will step forward in good faith, it’s Cablevision that’s holding its customers hostage.
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Posted In: Media & Publishing, TV, Cable & Telecom, Companies, Scripps, Scripps Interactive, cablevision, food network, hgtv, time warner cable
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