CBS's retransmission standoff with Time Warner Cable could be taking an ugly turn in the coming days.
With a July 24 deadline looming, Wall Street analysts are warning that a standoff between CBS and Time Warner Cable could lead to a CBS blackout. The blackout could affect 3.5 million homes -- roughly 29 percent of Time Warner Cable's video subscriptions -- in Texas, New York and Los Angeles, Wells Fargo Securities analyst Marci Ryvicker noted in a report.
This would mark the first time that CBS has allowed its signal to go dark in a retransmission dispute.
An agreement struck in 2009 by the two companies expired at the end of June, and an extension is due to expire on Wednesday.
CBS declined to disclose the rates it is seeking, but analysts say that the network is seeking about $2 per subscriber, from an estimated 75 cents to $1.
The two parties are accusing each other of hardball negotiating tactics.
CBS told TheWrap in a statement that the company "remains committed to working towards a mutually agreeable contract," and accused TWC of being unwilling to negotiate the same type of deals as other transmitters.
"Time Warner Cable is planning to drop the most popular programming in its entire channel lineup because it won't negotiate the same sort of deal that all other cable, satellite and telco companies have struck with CBS," CBS said. "Time Warner Cable has dropped nearly 50 channels in the last five years. CBS has never been dropped by a cable company before."
CBS, which released an ad directed at viewers in the possibly affected areas, is directing fans to the website KeepCBS.com, which urges fans to take action against the potential blackout.
Time Warner Cable, which has released its own ad covering the dispute (see above), claims that CBS is asking for 600 percent more in the potentially affected markets -- primarily, New York, Los Angeles and Dallas -- than TWC pays for the content in other areas. TWC calls that request "unprecedented."
"CBS wants Time Warner Cable to pay over 600 percent more than we pay in other areas from coast to coast for the same programming," Time Warner Cable said. "It's unreasonable to expect our subscribers and Time Warner Cable to pay that price and we are negotiating very hard for a reasonable price. This is not a standard debate over price increases. This is different. CBS's demand for a 600 percent premium is unprecedented."
"We're going to continue to negotiate and hope to come to a reasonable resolution before our deadline, so that our customers don't have to endure yet another broadcaster blackout," TWC added.