Still Dark: Mediacom Turns to FCC Again, Buys More Rabbit Ears

Mediacom was forced to pull 22 Sinclair stations from about 700K subs in 12 states at 12:01 Sat. Thousands of cable subs in Des Moines and Cedar Rapids showed up at the MSO’s offices for free antenna kits. In fact, so many people turned out, Mediacom ran out of kits, reported the Des Moines Register. "Plenty more [kits] will be showing up in the next 2 days," said Mediacom evp, ops John Pascarelli. Mediacom was also set to host several football parties Mon night, for subs who wanted to watch college bowl action on Fox. Execs would not say how many subs have defected, but described the numbers as not material. On Mon, the MSO filed an appeal at the FCC in the hope of federal intervention. Mediacom believes the FCC’s Media Bureau ruling was flawed, arguing that the complaint should’ve been considered by the full commission and that it erred by basing the reasonableness of Sinclair’s demands on the prices MCCC pays for cable nets. Mediacom chmn/CEO Rocco Commisso said during a conference call Mon that Sinclair still had not responded to its offer to enter into binding arbitration, a suggestion of the FCC’s Media Bureau. Meanwhile, Pali reiterated its sell on Mediacom stock in a research note titled "Between a Rocco and a Hard Place." Pali said it believes that the cost of Sinclair programming is escalating as the MSO continues to reject Sinclair’s demands. Pali also speculates that there may be existing MFNs with other broadcasters that would be negatively impacted if the MSO agrees to Sinclair’s terms. On the other hand, Citigroup suggested investors buy Mediacom on its current weakness. "First, even if Mediacom agrees to pay $0.50 per sub per month, the impact to Mediacom’s share price is only $0.28, far less than the recent weakness in Mediacom’s shares," he said in a research note. " Second, we believe Mediacom and Sinclair will reach an agreement soon, removing uncertainty, prompting a rise in Mediacom’s equity value."