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CBS-Time Warner Cable Wrestle; Britt Exits Amid $4 Billion Buyback: Media Roundup

Stocks in this article: CBS TWC

Updated from 2:37 p.m. EDT to include additional analysis.

NEW YORK ( TheStreet) -- Time Warner Cable (TWC), said Chief Executive Glenn Britt will retire at year's end and be replaced by Robert D. Marcus, the pay-TV provider's chief operating officer. Britt, 64, who became CEO in 2001, will also resign as chairman but remain on the company's board in a non-executive role, said New York-based Time Warner Cable, which announced in a separate statement that it had replenished its share buyback program to $4 billion.

Britt's impending retirement comes as Time Warner Cable is locked in a tug-of-war with CBS (CBS) over the network's demands for higher fees to carry its programming at local television stations which it owns in New York, Los Angeles and Dallas. CBS is likely to win the battle, says Wells Fargo media analyst Marci Ryvicker, as content providers attract an increasing number of viewers to their shows.

The companies agreed on Wednesday to extend the deadline on the expiration of CBS' re-transmission agreement to Monday, July 29, at 5 p.m. EDT. The extension indicates that, at very least, progress is being made to avoid a blackout of CBS programming in those three markets. Shows such as The Big Bang Theory hang in the balance.

The talks are focused on the length of the agreement and the price that Time Warner Cable would be required to pay for each subscriber that receives CBS programming in those areas. At the root of the contentious negotiations lies a debate over whether network programming should be viewed as free, or whether third-parties such as cable-TV providers, should be required to pay for that content.

"The cable-TV guys feel this is something that was supposed to be free, and that it's not fair to pass it on to the customers," Ryvicker said in a phone interview. "But the truth is that times have changed, and broadcasters can change their relationship with the MVPDs multichannel video programming distributor . The business model has changed."

Change occurred in 1992 when Congress passed legislation giving local-TV owners the choice whether to require pay-TV providers to air their programming, the so-called "must carry" clause, or to negotiate a free for that content, known as a "retransmission consent." Local TV-station owners, almost uniformly, now require pay-Tv operators to negotiation a retransmission consent agreement, which is what CBS and Time Warner Cable officials and their lawyers are haggling over.

Time Warner Cable makes the case that CBS and other networks broadcast their programming for free via over public airwaves, and therefore should expect to receive re-transmission fees that reflect its widespread availability, according to company spokeswoman Maureen Huff.

Yet Ryvicker argued that CBS, as the content producer, will likely win its latest round of bargaining with Time Warner Cable on the premise that increasing television viewership will ultimately bring more subscribers to pay-TV operators.

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