360AM: Comcast, Sinclair Make a Deal

360AM — Morning news briefing for Friday, Mar. 9 (Updated: 8pm ET)

A day before their current contract extension expires, Comcast and Sinclair Broadcasting this morning announced a four-year extension of their retrans deal for HD and analog carriage of Sinclair’s broadcast stations on Comcast’s systems through Mar. 1, 2011. The deal covers 37 Sinclair stations in 23 markets owned or operated by Sinclair. According to their joint press release, "The agreement also provides for the carriage of digital multicast channels which Sinclair is currently broadcasting in Baltimore and Richmond, as well as certain other multicast channels which the stations located in Comcast markets may broadcast in the future." [Release]

Comcast issued the following statement, attributed to EVP David Cohen: "Comcast is pleased to announce that we have reached agreement with Sinclair Broadcasting Company on a long-term extension of our existing retransmission consent agreement. Comcast has achieved its objective of not paying cash for broadcast carriage that would need to be passed on to our customers. Consistent with our existing agreement with Sinclair, and all of our other retransmission consent agreements, comparable value is being exchanged."

Sinclair responded this afternoon with a doozy of a press release rejecting any implication it’s not getting paid by Comcast. "Sinclair’s policy is that it does not enter into retransmission consent agreements without receiving compensation for retransmission rights and we did not violate that policy in our agreement with Comcast," commented Barry Faber, VP and General Counsel of Sinclair. 

"While we acknowledge the accuracy of public statements made by a Mr. David Cohen of Comcast stating that we are providing advertising and other services to Comcast, we disagree that such consideration is equivalent to the value that we are receiving from Comcast. To the extent that Mr. Cohen, who was not part of the negotiations between our companies, implied that our agreement reflects nothing more than an exchange of equivalent value with no compensation being paid for the right to carry our stations, we believe he has mischaracterized the economic terms of the deal," Faber’s statement continued.

"We believe that Mr. Cohen’s statement that Comcast did not pay ‘cash for broadcast carriage that would need to be passed on to [Comcast’s] customers,’ is not a denial that Comcast agreed to pay cash, but instead represents a claim that any such payments will not need to be passed on to subscribers. Since we believe that customers are already paying cable operators such as Comcast for the right to receive all of the programming carried, including broadcast stations, we are pleased to know that our agreement with Comcast will not require their subscribers to pay any additional amounts."

Sinclair said the cash payments from Comcast and other operators (including Time Warner Cable and Mediacom) in its recent retransmission consent deals will boost its estimated 2007 retrans revenues "from approximately $48 million to approximately $53 million. The prior estimate included retransmission revenues based on anticipated deal terms with Comcast at that time. The new estimate includes the final Comcast agreement terms, which were entered into today, as well as recent deals with some smaller independent cable companies. It does not include potential retransmission revenues from Charter or Cox with whom the Company is negotiating."

Sinclair CEO David Smith said he’s "extremely pleased" with the Comcast deal and "believe it represents a further step in our goal of monetizing the value of our retransmission consent rights. Contrary to statements made by Comcast, in our opinion this agreement, together with other agreements we have entered into recently, does in fact represent a shift in the retransmission consent paradigm. This view is well supported by the expectation of $53 million in retransmission consent revenue. In fact, we would be more than happy to waive the confidentiality clause included in the agreement with Comcast and disclose the specific terms to the general public."

Sen. John Kerry (D-MA), whose complaint about the proposed MLB/DirecTV exclusive spurred an FCC inquiry and the parties to grudgingly re-open discussions with Extra Innings’ other distributors, said in a statement today he’ll be "watching closely to ensure the league works in good faith." Sen. Arlen Specter (R-PA) also said he’ll be watching how the Extra Innings saga unfolds; his statement also calls for scrutiny of the NFL’s deal with DirecTV: "This arrangement should motivate the NFL to reconsider broader coverage on its Sunday ticket and Thursday/Saturday programming to make such games available to other carriers beyond DirecTV. It may be necessary for the Senate Judiciary Committee to have further hearings on the antitrust implications of the NFL and MLB TV programming and whether it is in the public interest to allow the anti-trust exemptions of the NFL and MLB to continue."

Time Warner Cable programming chief Melinda Witmer says TWC has the capacity to match DirecTV‘s 100-HD channel lineup. "I’m 100% confident we can have as compelling a lineup as DirecTV," she tells Phil Swann. She’s reluctant to put a number on how many national HD networks the operator will have deals with by year-end as negotiations are still underway [TV Predictions]. On Mar. 1 TWC launched its first free HD VOD channel in San Antonio, home to AT&T‘s U-verse. The channel features 19 titles from Wealth TV, the San Diego-based all-HD programmer, with more than 20 hours of content available by Apr. 1. DirecTV, meanwhile, this month expanded its high definition content by offering all games in its $69 Mega March Madness package in HD. [TV Predictions]

The Dept. of Commerce’s National Telecommunications and Information Administration will announce Monday the final rule for the digital-to-analog converter box coupon program, designed to help U.S. consumers receive free over-the-air television when full-power television stations cease analog broadcasting after February 17, 2009.

AT&T is revisiting its broadband partnership with Yahoo. The deal was struck by the former SBC in 2001 and expires in April 2008. AT&T is reportedly looking to scale back or end the partnership at a time when Google "has begun offering rich payments—approaching $1 billion in some cases—to partners, causing players such as AT&T to question their existing deals," according to the Wall Street Journal‘s page one story. In happier days, AT&T and Yahoo not only grew their broadband business together but also plotted to acquire Disney after Comcast‘s bid failed; now, AT&T has painted over the Yahoo logo on its vans and wants to stop sharing revenue with the Web portal. [WSJ]

Google CEO Eric Schmidt tells Bloomberg: "Eventually all of the copyrighted content will be available on virtually all of the sites. The growth of YouTube, the growth of online, is so fundamental that these companies are going to be forced to work with and in the Internet." Schmidt is fighting with Viacom over clips from MTVN and other nets. [Bloomberg]

UBS analyst Ben Schachter comments in a research note today on the 4G coalition formed by Google, eBay, Yahoo, DirecTV, EchoStar and Intel to lobby the FCC on a pending spectrum auction: "This coalition does not mean these co’s will actually bid, but that they want a say on how the auction will run. At 700 MHz this spectrum is theoretically superior for broadband distribution as it penetrates walls and other obstacles better than the spectrum available in last year’s auction… There are many new and potentially disruptive models that could develop from widely distributed (and portable) broadband. Clearly VoIP communication would benefit from widespread access. A key for Google and others would likely revolve around location-based personalized advertising."

The Wall Street Journal‘s "Numbers Guy" column revisits the math that formed the basis for Discovery Channel‘s The Lost Tomb of Jesus special last Sunday (which was pulled from Discovery Times Channel but will run on Discovery’s Spanish-language and HD channels, writes TV Week). Carl Bialik, aka WSJ’s Numbers Guy, talks to University of Toronto statistician Andrey Feuerverger about his number crunching that came up with the 1-in-600 odds that the tomb in question held the remains of Jesus, Mary Magdalene and their supposed son named Judah (not to mention other friends/relatives). "No one is questioning Prof. Feuerverger’s statistical credentials, or his calculation given the assumptions made," writes Bialik. "But his conclusion is only as reliable as the assumptions that went into it." Those assumptions have been questioned by Scientific American and academics such as University of California statistician Ivo Dinov, who says, "I wouldn’t be comfortable coming up with a number like this, because the general audience will not understand that it is very, very subjective." Feuerverger isn’t comfortable either. "When I was doing the calculation, I was naively unaware of the extent to which the filmmakers might be depending on the ultimate result of it," he tells Bialik. His methodology can’t be tested by other academics (he signed a nondisclosure agreement with the producers) but he hopes to publish a paper, not yet completed, in an academic journal for peer review. "Obviously it would have been a whole lot better if I had completed the paper" before the documentary aired, he tells Bialik, whose blog continues the discussion. [WSJ | Numbers Guy blog | Feuerverger statement]

Comcast and the state of Massachusetts are in a legal dispute over a $250 million tax bill. [AP]

Verizon filed an application with the Rhode Island PUC seeking a franchise to provide FiOS TV service to Providence and 11 cities and towns. [Providence Business News]

Showtime gives Al Gore’s Oscar-winning An Inconvenient Truth its cable premiere on Sunday. [AP]

Turner Classic Movies EVP/GM Tom Karsch is stepping down; no replacement has been named.

USA Network landed the cable TV rights to Borat for $11 million and a five-year term that will bring the 20th Century Fox film to USA in April 2009. [Variety]

The Weather Channel launched today in Second Life virtual world; click here for details on "Weather Island" and other networks launching 3D online communities.

Is Rita Cosby out at MSNBC? New York Post‘s Page Six thinks so. [Update: yep, Cosby leaves at the end of Mar.]

The number of sitcoms will increase this fall as current hits, like The Office, look to expand. NBC is testing an hour-long mash-up of two old episodes of The Office with some unaired footage for a different kind of repeat it’s calling a ‘newpeat.’ [WSJ | Release]. NBC’s marketing dept. is also bringing the funny to its dramas: a faux promo (fauxmo?) running on YouTube and Break.com called Zeroes is NBC’s unattributed mock-plug for Heroes. So far it’s attracted more than 1.5 million views. [Variety]

Bloomberg profiles new NBC head Marc Graboff.

MySpace News, a blend of news and social networking, is coming; Terry Heaton’s PoMo Blog has the scoop.

Sony is launching a pair of games-based virtual worlds for PlayStation 3. The first, called Home, will launch in beta next month while LittleBigPlanet, based on player cooperation, is slated for this fall. [AP]

Forbes published its annual ranking of billionaires today: check out how Rupert Murdoch, Sumner Redstone, John Malone, Charlie Ergen & Co. are doing (and weep).

– Shirley Brady

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