Univision Pulls Signal in Toledo

In yet another nasty dispute over license fees, Univision last week pulled its signal off Buckeye CableSystem in Toledo, Ohio.

Following a breakdown in negotiations, the Spanish-language service deactivated its decoder at 8:30 a.m. last Thursday, Feb. 1, removing its signal from the 130,000-subscriber cable system. At presstime Friday, Univision remained off the system.

For the past decade, Univision hasn't charged Buckeye for its programming. In fact, the network only began imposing license fees on MSOs just last year.

Univision came to Buckeye in September with a rate card calling for an initial 14 cent-per-subscriber, per-month charge. Over five years, that contract would have cost Buckeye $1.2 million.

Buckeye, whose corporate name is Buckeye Cablevision Inc., has balked at shelling out any license fees for Univision. Buckeye officials argue they shouldn't be charged because the Spanish-language programmer is carried free on cable-through must-carry for its broadcast TV stations-in 32 markets that serve 42 million subscribers.

Univision doesn't have a broadcast outlet in Toledo, which has a population that's only 3 percent to 4 percent Hispanic.

Following six months of negotiations, Univision's most recent offer to Buckeye calls for an initial 7-cent license fee. There is also a clause that mandates the operator carry Univision's sister service, Galavision, on digital cable.

That proposed contract would cost Buckeye $600,000 over three years, according to Tom Dawson, the system's senior manager of government and community affairs.

The cable operator's counteroffers have included putting Univision on broadcast basic, rather than expanded basic, in exchange for continued free carriage of the network; or offering the network à la carte to subscribers, for a fee.

Univision, in turn, argued that 165 cable operators now pay for the Spanish-language service.

In a letter to the Toledo Blade, Univision senior vice president of affiliate relations Tim Carry said Buckeye compensates all its English-language networks for programming, but has refused to pay "a nominal fee" for Univision.

"Even worse, Buckeye CableSystem is insisting that Spanish-language viewers pay separately for Univision programming, although Buckeye does not charge English-language viewers separately for channels such as MTV, ESPN, CNN or CNBC," Carry wrote in his letter.

Buckeye is talking to a number of Spanish-language networks that could be possible replacements for Univision, including Telemundo, Canal Sur and TV Azteca, Dawson said. The cable system is running a scroll, in English and Spanish, on Univision's former channel slot with a message that explains Buckeye's side of the dispute and asks which network viewers would like to replace it. On that channel, Buckeye is also running two tapes, including an interview with its marketing manager.

Buckeye-which is owned by Block Communications Inc., parent of the Blade
-has a history of trying to hold the line against rate increases from programmers. Several years ago, it removed Fox Sports Detroit from its lineup for eight months when the regional sports channel sought a 700 percent license-fee increase.

And Buckeye opted not to carry NBC's cable package for the 2000 Olympic Games, which included a more than $1-a-year, per-subscriber Olympics surcharge, rate hikes for CNBC and MSNBC; and increased distribution for those channels.

Univision claims Nielsen Media Research counts more than 5,000 Hispanic homes in Buckeye's service area. Buckeye has argued that it should only be asked to pay a fraction of the license fees paid by operators in cities with large Hispanic populations.

The current battle has been very public, with the city's Hispanic Affairs Commission rallying around the programmer. And both Univision and Buckeye have been running newspaper ads regarding the dispute.

The programmer has also sent letters to subscribers that suggest they switch to direct-broadcast satellite service. DirecTV Inc. has run Spanish and English language ads in the market.

"By treating Spanish-language networks and customers different from English-language customers, Buckeye is demonstrating its lack of regard for the Toledo Hispanic community," Carry charged.

As part of its offer to Buckeye, Univision had earmarked part of its National Hispanic Community Affairs funds-$27,000-for a Hispanic community-outreach initiative in Toledo.

In December, Univision chairman Jerrold Perenchio extended the network's affiliation agreement with Buckeye, which was set to expire at the end of December, until Jan. 31 at the mayor's request.

Elsewhere on the MSO-programmer front lines, Fox Sports Midwest and Charter Communications Inc. last Friday (Feb. 23) avoided an interruption of the regional sports network's signal by reaching an 11th-hour carriage agreement.

Fox Sports Net and Charter reached "an agreement in principle," although the official contract hadn't been signed by press time, said a Charter spokesman.

Fox representatives would not comment on the deal.

The regional-sports network was prepared to pull its signal after the two sides failed to come to terms on a new rate card, which Charter officials characterized as a doubling of the existing, undisclosed rate. The prior deal expired last December.

Fox Sports Midwest offers live games from such pro teams as Major League Baseball's St. Louis Cardinals, the National Hockey League's St. Louis Blues and the National Basketball Association's Indiana Pacers.

R. Thomas Umstead contributed to this report.