The blackout affectsCBSand CW-affiliated stations in 14 major markets including New York, Los Angeles and Chicago. Also off the air are the CBS Sports cable channel and Smithsonian Channel.
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CBS and AT&T executives negotiated down to the wire Friday night as the 11 p.m. PT contract expiration deadline approached. AT&T said in a lengthy statement it offered to continue negotiating to avoid a service disruption but CBS declined. However, CBS said AT&T declined its offer of a 30-day extension to keep the signals up.
“CBS is a repeat blackout offender and has removed these same stations from DISH Network and Charter Spectrum customers in the past and threatened to remove them from others to ensure much higher fees,” AT&T said in a statement. “CBS continues to demand unprecedented increases even as CBS advances content on CBS All Access instead of on its local broadcast stations. CBS has said publicly that it priced All Access much higher to capitalize on customers it can capture from cable, satellite or other means of distribution.”
CBS said it already granted AT&T one short-term contract extension after months of negotiations. While AT&T accuses CBS of seeking exorbitant price hikes for its stations, CBS counters that it is asking for the same terms that the Eye has in retrans pacts with other sizable MVPDs. DirecTV and U-verse together reach about 22.4 million subscribers.
“CBS is simply looking to receive fair value for its popular programming and is proposing economic terms similar to those that AT&T’s competitors have accepted in hundreds of our recent distribution agreements,” CBS said. “The DirecTV deal expiring tonight was signed in 2012 and is nowhere close to today’s fair market terms for CBS content – to which AT&T’s competitors have repeatedly agreed.”
The friction between AT&T and CBS marks one of the largest retrans-related station blackouts in recent memory as it hits so many large markets. But AT&T is also in a retrans standoff with Nexstar Media Group in a deal covering 120 stations that went dark on DirecTV and U-verse on July 4. A number of those stations are also CBS affiliates. Moreover, CBS’ retrans deal with AT&T also covers carriage on the DirecTV Now streaming platform for the 28 O&Os and another 117 independently owned CBS affiliates, which are now dark on DirecTV Now although the independent affiliates remain on the mothership DirecTV platform.
“While we continue to negotiate in good faith and hope that AT&T agrees to fair terms soon, this loss of CBS programming could last a long time,” CBS warned in its statement.
AT&T blasted CBS for investing in the CBS All Access service that competes with MVPDs rather than its local stations that receive high retrans fees. It’s understood that CBS was looking to raise its monthly per subscribe fee from about $2 to $3 under the new deal.
“In short, CBS is seeking to convert a free, publicly subsidized broadcast station into a high-cost channel while leaving cable and satellite customers holding the bag,” AT&T said.