Comcast, CBS Agree on Retrans

Comcast and CBS struck
a note of retransmission peace,
reaching a 10-year agreement
between the biggest cable operator
and an aggressive broadcaster
more than a year before their
old deal would expire.

Comcast avoids a potentially
embarrassing retransmission
battle while it seeks federal
approval for its NBC Universal
joint venture. CBS gains more
retransmission cash (either directly,
or through higher fees for
Showtime) and secures a significant
carriage increase for two
smaller cable networks.

Financial terms were not disclosed.
But both companies said
publicly that the new pact includes
more robust carriage for
the Showtime Networks premium
channels (including an
online component), Comcast’s
promise to launch the Smithsonian
Channel and a pledge to
extend the reach of CBS College
Sports Network.

CBS has aggressively sought
retransmission cash and has
said it expects its total retransmission
haul to be in the $100
million range this year. CBS
CEO Les Moonves said during
the CBS earnings call last week
the broadcaster was on track to
achieve its goal of $250 million
in annual retransmission revenue
by 2012.

“This does a lot more than
recognize the value of CBS entertainment,
news and sports
programming on Comcast’s
cable television plat form,”
Moonves said. “It also includes
online and VOD distribution
and enhances the long-term
growth of Showtime and improves
the economics of CBS
College Sports and the Smithsonian
Channel. This is a great
deal for both parties.”

CBS estimates it has completed
about 60 retransmission
agreements, including deals last
year with Time Warner Cable,
Verizon Communications and
Cablevision Systems.

Coming up on the retransmission
front, Time Warner Cable’s
carriage agreement with The Walt
Disney Co. (for the ABC broadcast
network and cable channels
like ESPN) expires Sept. 1, while
the Cablevision Systems retransmission
deal with Fox Broadcasting
expires in October.

SNL Kagan estimates Smithsonian
Channel is available in
about 9.2 million homes and
receives an average carriage
fee of 23 cents per subscriber
per month. CBS Col lege
Sports, available in about 36
million homes, was attracting
about 20 cents per subscriber
per month, according to SNL

People familiar with the deal
said Comcast will launch Smithsonian
beginning next summer
in select digital markets. Comcast
has about 19.2 million digital
video customers.

CBS College Sports already is
available to some Comcast customers
on a digital or sports tier.
The new agreement will broaden
that base as well.