Moonves: Verizon Deal Proof It’s Them, Not Us

CBS CEO Leslie Moonves says its newly signed retransmission consent agreement with Verizon FiOS shows that CBS is "prepared to move decisively and thoughtfully to achieve a good conclusion" with all cable and satellite operators. "This important deal was reached swiftly and amicably in just a few days after our conversations began," Moonves says in a staff memo released to the media. "In it, we achieve fair value for our over-the-air rights, while preserving our streaming rights as well."

In contrast, what’s holding up the CBS-Time Warner Cable negotiations? Consider three possible explanations:

1) Plenty of people can just turn off their cable boxes and pick up CBS with an antenna. Sales of digital antennas are up in Dallas, New York and Los Angeles, according to Radio Shack. Time Warner, obviously, feels that the clock isn't ticking on this dispute in the same way it might if its customers were missing, say, new episodes of Breaking Bad; even if the dispute does continue into football season, it won't have the same impact of blacking out a pure cable network.

2) Time Warner is serious about cutting costs through whatever means necessary, and that includes cutting features, raising prices and, obviously, wars of attrition with content publishers. The U.S. cable market is mature, and Time Warner is a publicly traded company: It has to show year-over-year increases in profits in order to keep paying out dividends, and there's nowhere else to expand. Retrans fees are consistently on the rise, and they've been a sore spot with MSOs since they came into being in 1992; the content used to be free, and now it's getting less free all the time.

3) Among broadcasters, CBS has the smallest number of sister cable channels to leverage in a fight like this—there's only premium cable net Showtime. Showtime isn't insignificant, of course, especially not with its boxing package—fans are already biting their nails about the Sept. 14 Mayweather-Canelo match, and that's the sort of thing that could shift subscribers over to a service like good cop FiOS. But in the broadcasting pantheon, pretty much everyone else can strong-arm an MSO into signing a hefty retrans hike without too much trouble. NBC has high-rated cable networks like USA and Bravo alongside niche networks such as Syfy and E!; ABC has the Disney family of cable nets and the vital ESPN; Fox has powerhouses like FX and the upcoming FS1. Granted, not all these networks even share a division, but you can bet they're all on the table when it comes to making these deals. If half your cable package goes dark when you black out a broadcast network, you're in a hurry to patch things up with them.