Market Overview

Time Warner's Blackout Of CBS Could Last Weeks (CBS, TWC)

Time Warner's Blackout Of CBS Could Last Weeks CBS, TWC

Do you live in New York, Los Angeles or Dallas?

Do you subscribe to Time Warner Cable (NYSE: TWC) and enjoy watching programming on CBS (NYSE: CBS)?

Don’t look now - well actually, you can’t. And, maybe not for several weeks.

Reuters reported Sunday that thanks to the fact that the two companies can’t seem to reconcile their differences, industry analysts believe the blackout of CBS programs on Time Warner may last until the NFL regular season kicks off in September.

Morningstar analyst Michael Corty said, "Until the NFL games are on CBS, I can see this dragging on."

Rich Greenfield, media analyst at BTIG, told Reuters, “The longer (CBS) waits, the more they don't get a chance to promote their fall lineup in the two biggest cities in the country."

The problem is that when carriers and content providers collide, it's usually all about money. In this case, the issue is how much money Time Warner Cable would pay CBS to carry its programs.

Related: Time Warner Brings Out New Weapon In Dispute With CBS

Time Warner Cable’s blackout of CBS programming began Friday. Saturday, Time Warner got some help in the form of an endorsement from rival, DirecTV (NASDAQ: DTV).

In a statement reported by Reuters, the company said, "DirecTV has certainly had its share of these battles, so we applaud Time Warner Cable for fighting back against exorbitant programming cost increases."

DirecTV was not being totally altruistic.

"We are also appalled to learn that CBS is now punishing DIRECTV customers,” the company said, "who may happen to have Time Warner as their Internet provider, by denying them access to CBS content online."

CBS, it turned out, suspended online access to full episodes of network shows for anyone using Time Warner Cable for Internet in the affected markets. This included a number of DirecTV customers in those markets.

In addition to any incentive CBS may have to settle in order to promote its fall lineup, there is another legal bottom line. As Reuters reported, in the U.S., the rates cable providers can charge is regulated at the local level.

According to industry analysts, if the blackout continues, the FCC and/or Congress are likely to take action.

BTIG’s Greenfield told Reuters, "If you start hearing rumblings from the Senate, the House, and the FCC that's where you could really start to feel pressure to make something happen here."

Meanwhile, a source familiar with CBS told Reuters Friday that the company offered to continue negotiations while programming continued on Time Warner Cable under the same terms as the previous contract.

At the time of this writing, Jim Probasco had no position in any mentioned securities.

Latest Ratings for TWC

May 2016Deutsche BankMaintainsBuy
Mar 2016WunderlichDowngradesBuyHold
Nov 2015SunTrust Robinson HumphreyInitiates Coverage onNeutral

View More Analyst Ratings for TWC
View the Latest Analyst Ratings


Related Articles (TWC)

View Comments and Join the Discussion!

Posted-In: btig CBS CongressAnalyst Color News Events Analyst Ratings Media Best of Benzinga

Latest Ratings

UBERRBC CapitalMaintains50.0
WIXJMP SecuritiesMaintains363.0
CVIJP MorganInitiates Coverage On22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at