Update: That “brief” extension turned into an all-nighter for Time Warner Cable, which is still negotiating with News Corp (NYSE: NWS) and Scripps on behalf of itself and private cable operator Bright House. Check our comments for a taste of what they face if deals can’t be reached and Fox, Food and more get yanked today.
Original: Past midnight on the east coast and Fox is still on Time Warner Cable (NYSE: TWC) during a brief extension while negotiations continued. But Cablevision (NYSE: CVC) fans of home decor and cooking just took a hit. Harsh words from the Long Island cable operator as it fails to reach an agreement with Scripps Networks (NYSE: SNI) to keep HGTV and the Food Network on its systems, while Scripps says it is asking for “pennies” for “top 10” networks.
Cablevision claims: “Unfortunately, Scripps has decided to stop distributing HGTV and Food Network to Cablevision customers upon the expiration of our current agreement at midnight, December 31. We are sorry that Scripps’ current financial difficulties are making it impossible for them to continue our relationship on terms that are reasonable for Cablevision and our customers. We wish Scripps well and have no expectation of carrying their programming again, given the dramatic changes in their approach to working with distributors to reach television viewers.”
A CVC rep said the company won’t go beyond the statement when I asked for an explanation of the reference to finances. Scripps EVP John Lansing pushed back in a statement issued after the company’s initial PR push: “Scripps Networks Interactive is among the fastest growing and most financially sound media companies in all of cable television.” Scripps recently acquired majority interest in the Travel Channel through a leveraged JV with Cox; the debt is just under $700 million. The company sold its UK comparison shopping site uSwitch last week after months of searching for a buyer.
Scripps, which says it has never been off the air because of a contract dispute with a distributor and would continue negotiations, is asking its viewers to lobby Cablevision for a return, claiming that CVC is off base. In a video clip, HGTV President Jim Samples explains that Cablevision will tell you the cost increase Scripps is asking for has to be passed on to subscribers “but it’s simply not the case. The rates ... are some of the lowest in the industry. ... The adjustments we’re asking for are just pennies per subscriber and that should have no real effect on consumers.”
The dispute affects roughly three million households in New York, New Jersey and Connecticut; it also cuts CVC’s HD lineup by two. Scripps EVP John Lansing contends that even with the rate increase about 35 other networks would be getting higher fees than Food or HGTV. More from the Scripps perspective in this release.
Meanwhile, TWC continues to talk with separately with News Corp and Scripps, leaving those channels live for now. TWC is also negotiating on behalf of Bright House. Why are negotiations continuing well past 3 a.m. eastern? Because people can catch up on recorded shows but live sports events are leverage and big bowl games rank high on that scale. The Sugar Bowl with Cincinnati vs. Florida airs on Fox at 8 p.m. on New Year’s Day.