This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Sinclair Likley to Use New-found Size to Challenge Networks

Stocks in this article: CBS TWX SBGI

NEW YORK ( TheStreet) - That bruiser of a battle between CBS (CBS) and Time Warner Cable (TWC)over retransmission fees ended earlier this month, but don't think the broadcast community lacks for others to lead in lieu of CBS chief executive Les Moonves.

Moonves, television's resident retrans champ, gets credit for taking Time Warner Cable down after 32 blacked-out days. Yet the gap between TV stations' share of viewers and share of programming fees remains vast enough to ensure additional standoffs. And the vibes emanating from Wells Fargo Securities LLC analyst Marci Ryvicker suggest Sinclair Broadcast Group Inc. stands ready to lead at least one retrans redux.

Sinclair has been so busy gobbling up TV stations it's now the country's largest station group. All the more reason, obviously, for the Baltimore-based broadcaster to insist on pay-for-play parity between TV stations and cable networks. But, as Ryvicker reported in a Wednesday, Sept. 10, update on Sinclair, this parity has yet to be.

The analyst's source was no less than David Smith -- Sinclair's chairman, president and CEO -- who over a Wells Fargo-hosted dinner lamented that TV stations receive only 7% of total programming fees (the combination of retrans fees for TV stations and carriage fees for cable networks). Yet those same stations, he said, deliver 40% of all viewers.

"Why shouldn't our retrans fees be valued the same as the cable net's carriage fees?" Smith asked.

It's not an easy question to answer, even though the media world is rife with inequities. Advertising giant WPP plc recently noted that U.S. consumers spend only 6% of their time with print products, yet the medium continues to command 23% of ad budgets. And though this discrepancy primarily reflects Madison Avenue's aversion to change, print's defenders can at least argue a magazine ad versus an online ad is an apples-to-oranges comparison.

The argument falls flat, however, on dealing with viewers of content from TV stations versus content from cable networks -- especially when the content of each is distributed by the same multisystem operator. Eyeballs are eyeballs, after all, which means the sort of standoff that pitted CBS against Time Warner Cable stands to be re-enacted time and again until those eyeballs command comparable values.

-- Written by Richard Morgan in New York

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs