A battle brewing between Comcast Corp. and Sinclair Broadcast Group Inc. could leave millions of viewers without
tonight, though Philadelphia will not be affected.
Sinclair had threatened to yank its television stations from Comcast as of 2 a.m. today unless the Philadelphia cable company agreed to pay for the content.
Typically, cable companies have not had to pay for content broadcast over the air for free, but that is changing.
And if this trend toward payment, which so far has affected only smaller cable companies, grows, Comcast could see its expenses rise sharply. Programming costs eat up about 30 percent of Comcast's video revenue, said Craig Moffett, an analyst with Sanford C. Bernstein Ltd.
Sinclair, which owns, programs or provides sales services to 58 stations in 36 markets, hopes to leverage its power to boost its revenue. It owns Fox stations in some markets, giving it the cudgel of such popular shows as American Idol and Gilmore Girls.
It does not own any stations in the Philadelphia area.
"Our view is that we need to be compensated in connection with retransmission consent," Sinclair vice president and general counsel Barry Faber told the Associated Press. The company is expecting to receive $48 million in retransmission-consent fees in 2007 - about double what it received last year, Faber said.
Comcast spokeswoman Jenni Moyer said the company's "first goal is to protect our customers from being charged extra for free TV.
"We'll continue to offer Sinclair's broadcast stations, unless they demand that those stations be removed," she added.
Sinclair, based in Hunt Valley, Md., pulled its stations earlier this year from another cable provider, Mediacom Communications Corp., for several weeks during a similar negotiation over "retransmission consent" - the permission granted by broadcasters to cable and satellite providers to carry stations that are available over the public airwaves.
Mediacom eventually caved to the pressure two days before the Super Bowl, and last week, nine small cable operators agreed to pay CBS Corp., also a large station owner, retransmission fees.
But Mediacom has only 1.5 million subscribers, compared with Comcast's 24 million.
"Comcast is just plain too big for Sinclair to push around," Moffett said.
Even so, he said, the situation bears watching because the Sinclair agreement, once it is reached, will be viewed as a precedent.