CBS and Time Warner Reach Fresh Broadcast Deal

Time Warner Cable extended a deal to carry CBS television stations, CBS said on Tuesday, avoiding what could have been another heated industry dispute.

CBS did not disclose details of the agreement, but it comes just days after its sister company Viacom threatened to pull its cable channels from Time Warner's 13 million homes because of a disagreement over a separate deal.

The Time Warner-Viacom dispute was eventually resolved but underscored the rising tensions between networks, which provide programming, and cable operators, which transmit that programming into living rooms around the country.

CBS Chief Executive Les Moonves has made new broadcast deals a priority, specifically insisting that he wants cable operators to pay CBS for the right to carry its stations in what are known as retransmission deals. In the past, deals involving cash payments were rare.

Moonves declined to comment on the particulars of the deal with Time Warner Cable , other than to say, "We're very pleased with the results" of the deal, which runs through 2013.

But a person familiar with the talks said that Time Warner Cable will not pay cash for the right to carry the CBS stations, agreeing instead to other forms of payment. One will involve running advertisements on some CBS stations.

Additional payments will come from premium fees that Time Warner Cable will pay to carry Showtime, a CBS cable network that features movies and original series, according to another person familiar with the talks.

While CBS has previously reached around 25 deals with smaller to mid-size cable companies, until now it has not announced a deal with one of the major cable operators.

It still needs to work out agreements with a number of the other big operators, including Charter Communications , Cablevision Systems , and Comcast .

Moonves, in an interview, said active discussions were taking place with some of those companies, and that the deal with Time Warner, the second-largest operator, should help set the stage for other deals.

"Obviously, getting a company the size of Time Warner and the power of Time Warner to do a deal that is satisfactory for us and for them is a major accomplishment," he said.

CBS has been at the forefront of a broader push by broadcasters to get paid by cable operators that carry their stations.

Still, the issue has been largely sidestepped. Cable operators have held the line on not paying broadcasters for TV stations but offset that by raising the rates they are willing pay broadcasters to carry their cable networks.

As an example, cable operators pay fees to Walt Disney to broadcast ESPN in exchange for free transmission of its ABC network. One of the sources said a similar arrangement involving Showtime and the CBS network was worked into Tuesday's deal with Time Warner Cable.

Time Warner Cable, meanwhile, has appeared willing to play hardball in talks with broadcasters. In October it was involved in a very public dispute with LIN TV.

That fight over retransmission consent resulted in LIN TV pulling its free-to-air broadcast of local affiliate stations of NBC, Fox and CBS from the Time Warner Cable system.

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