TV blackout wars in a quiet period

December 27, 2013: 1:00 PM ET
NEW YORK (CNNMoney)

The TV industry has a holiday tradition straight out of "How The Grinch Stole Christmas:" End of year feuds that lead to channel blackouts for viewers.

But this year, everybody is playing nice. (It's almost as if the hearts of television executives have collectively grown three sizes.)

At issue are the carriage fees that distributors like Comcast and DirecTV (the biggest cable and satellite providers in the United States, respectively) have to pay to carry cable channels. They regularly have to re-negotiate fees with programmers like The Walt Disney Company, which controls ESPN and ABC Family, and Viacom, which owns MTV, Nickelodeon and Comedy Central.

Talks tend to get heated toward the end of the year -- but evidently not this year. On Tuesday, Time Warner Cable and Viacom announced a deal a full week before the Jan. 1 deadline.

A number of other high-stakes negotiations have also been completed in recent weeks. An informal survey of industry representatives indicated that last-minute blackout threats were unlikely this New Year's Eve.

Distributors and programmers tend to keep their deals a secret -- for competitive reasons and to cultivate a "no drama" perception in the industry.

For example, a spokesman for Turner Broadcasting, the division of Time Warner that owns CNN, TNT and other channels, said Turner "completed long-term agreements with a number of top-10 U.S. distributors," but declined to name any specific distributors.

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Time Warner Cable and Viacom likely announced their new pact on Tuesday because both companies have a history of public spats. Five years ago they blasted each other in advertisements and didn't agree on a new deal until after the ball had dropped in Times Square.

Several industry executives pointed to the damage wrought by Time Warner Cable's bruising summertime feud with CBS as a reason for this seemingly peaceful period.

CBS and Showtime were blacked out in Time Warner Cable homes in New York and Los Angeles in August. Time Warner Cable lost about 300,000 subscribers over the summer, which it blamed in part on the blackout.

For a distributor, that's a worst-case-scenario -- no company wants to see it repeated.

"Nobody wants to fight before a deadline anymore," a distribution executive said on condition of anonymity.

Time Warner Cable's negotiations since then have gone more smoothly. The cable company's deal with Discovery Communications was set to expire at the end of this year. Channels like Discovery, TLC, Animal Planet, and OWN could have been pawns in a fight over fees, but the two companies came to an agreement on a new contract in mid-November.

The cable company also cut a new deal with A+E Networks, the owner of A&E, History and Lifetime.

Time Warner Cable (TWC) and several other operators are still in end-of-the-year negotiations with the MLB Network, but there haven't been any warnings of a possible blackout.

Meantime, Disney (DIS) and the Dish Network remain in talks over a new contract, nearly three months after the expiration of their last contract. The delays have raised eyebrows in the industry, but neither company is expecting a breakdown that could cause a blackout in the 14 million homes served by Dish.

Come Jan. 1, there could be scattered blackouts of local television stations, though, due to what are known as retransmission consent negotiations. Distributors have to pay local stations for the right to carry them, and occasionally the negotiations get so testy that the stations go dark for a period of time.

The CBS affiliate in Hartford, Connecticut is warning of a possible blackout in Cablevision homes and the Fox affiliate in Oakland, California is warning of the same in Charter homes, to name two examples. But these disputes usually get settled before the self-imposed deadlines.

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