Broadband Cable Association of Pennsylvania


August 24, 2012

As angry as consumers are about widespread TV channel blackouts, mad men are really fuming. Ad execs say that escalating programming battles - which in the past rarely resulted in the loss of a channel - are hurting TV ratings, disrupting scheduled commercial time and jacking up rates.

The situation is bad enough that some Madison Avenue execs say it threatens to upend the entire pay-TV business model. One big change is that local broadcast stations are pushing cable and satellite-TV companies to pay them to carry signals that used to be free, leading to so-called retransmission disputes. Just last week, New York station WPIX went dark in more than 3 million Cablevision homes, leaving marketers scrambling to place their back-to-school ads elsewhere. "If you're in New York and you're buying their news, it takes supply out of the market and pushes up prices," said Marc Morse, a top TV buyer with RJ Palmer. "People have said this is unacceptable, they've got to get their act together." Added Gary Carr, chief TV buyer at TargetCast: "We're losing audience for our advertisers. We're guaranteed ratings, but they're not running when we want."

Cablevision's blackout of WPIX, part of a broader battle with station owner Tribune Co., is one of scores of fights breaking out this year. The two remain far apart on a deal, according to one source close to talks. So far this year, there's been a 35 percent uptick in programming disputes, with channel blackouts hitting 73 markets around the country, according to the American TV Alliance, which is backed by cable and satellite-TV companies. Advertisers are also suffering from Dish Network's decision to dump AMC Networks, home to "Mad Men" and "Breaking Bad." Satellite-TV provider Dish is in 14 million homes. And just a few weeks ago, 20 million DirecTV customers lost access to Viacom channels, including MTV, Comedy Central and Nickelodeon, while the two argued over higher fees.

Ad execs expect things to get worse before they get better. "If it happens more and more, [pay-TV providers] could be hurt," said TargetCast's Carr. "People are going to get TV from Hulu or video-on-demand or watch less TV." Industry execs on both the content and distribution side believe something's got to give. "I don't think this problem is going away, it's going to get more heated," said Rino Scanzoni, who as GroupM's chief investment officer oversees $25 billion in US ad spending. "The big concern I have is that this could lead to an a la carte menu, and advertisers lose if cable channels lose distribution." Scanzoni says Federal Communications Commission chief Julius Genachowski has tapped Madison Avenue for its views on the topic, although so far the regulator has been reluctant to weigh in. New York Post

Dish Network Corp. was sued by the U.S. Federal Trade Commission and accused of violating the agency's National Do Not Call Registry in its telemarketing operations. The FTC said in a lawsuit filed yesterday in federal court in Springfield, Illinois, that the second-largest U.S. satellite-television provider illegally called millions of consumers who asked its telemarketers or its affiliates not to call them again. "We have vigorously enforced the Do Not Call rules and will continue to do so to protect consumers' right to be left alone in the privacy of their own homes," FTC Chairman Jon Leibowitz said in a statement. Leibowitz said it was "particularly disappointing when a well-established, nationally known company -- which ought to know better -- appears to have flagrantly and illegally made millions of invasive calls to Americans who specifically told Dish Network to leave them alone."

Dish said in an e-mailed statement that it disputed the FTC's allegations, saying its marketing practices reflect "best-in-class standards" and have been certified by an independent third-party expert after a thorough review. "We vigorously will defend ourselves against the claims," John Hall, a spokesman for Englewood, Colorado-based Dish, said in the statement. DirecTV, based in El Segundo, California, is the largest satellite TV provider. The case is Federal Trade Commission v. Dish Network LLC, 3:12-cv-03221, U.S. District Court, Central District of Illinois (Springfield). Bloomberg

Officials from Comcast-Spectacor will meet with the Virginia Beach City Council on Tuesday to propose building an arena to house an NBA team. The Hampton Roads Business Journal has identified the team as the Sacramento Kings.

Ike Richman, a spokesman for Comcast-Spectacor, told the Daily News in a statement: "Comcast-Spectacor, through several of our subsidiaries, and Live Nation, both of which have a substantial presence in Southeastern Virginia for many years, are always looking for new opportunities to expand our business in the area. We will refrain from making any comments until we are in Virginia Beach on Tuesday. "At our presentation on Tuesday we will elaborate our collective plans for a new arena. Despite preliminary reports, no specific professional sports team from any league has been identified as the potential tenant for this building." Comcast will guarantee a 25-year lease on the new arena, reportedly for naming rights and broadcasting the games, sources told the business newspaper. Comcast already owns the Ted Constant Convocation Center at Old Dominion University, in Norfolk.

The Sacramento Kings are owned by the Maloof family. A deal between the Maloofs and the city of Sacramento reportedly fell apart 3 months ago. The deal was for a $391 million entertainment complex. Sources told the business newspaper that an announcement is expected Wednesday to say the Kings will move to Virginia Beach The Atlantic Coast Conference has agreed to include Virginia Beach as a possible venue for its postseason basketball tournament. "Comcast, Live Nation and Global Spectrum have come to the city," Virginia Beach mayor Will Sessoms told the business newspaper. "They would guarantee us a professional sports team" if the deal goes through. Sacramento mayor Kevin Johnson, a former NBA star guard, has tried to keep the Kings in Northern California, but could not come to an agreement with the Kings owners. "You can't do a deal with somebody you don't trust," George Maloof Jr. said about Johnson, according to the Sacramento Bee. "I don't trust him." Last week, George Maloof said: "We have been approached by several cities over several years about moving the Kings and we will not comment other than that." Comcast-Spectacor formerly owned the 76ers before selling the team to Josh Harris before last season. Philadelphia Daily News; more in Hampton Roads (VA) Business Journal

A county judge has rejected former state Rep. Bill DeWeese's bid for a new trial on corruption charges. Thursday's ruling by Dauphin County Judge Todd Hoover clears the way for DeWeese's lawyers to appeal his conviction to the state Superior Court. The judge defended several trial rulings that DeWeese cited as justification for a new trial. He also turned down a motion to modify DeWeese's 2 1/2- to five-year prison sentence. The 62-year-old Democrat from Greene County is incarcerated at Retreat state prison near Wilkes-Barre. He was convicted in February of five felonies involving the use of public resources for political purposes. He was unopposed in the April primary and remained on the ballot until a state judge ruled last week that his convictions make him ineligible for re-election.

The state Supreme Court ordered Thursday that the Voter ID hearing be held Sept. 13 in Philadelphia. The order ends a dispute between the law's opponents, who wanted a September hearing, and the Corbett administration, which urged waiting until October. The law, which takes effect in the Nov. 6 election, requires all voters to show specific forms of photo ID at the polls. Voting-rights groups filed suit to block the law and are appealing a Commonwealth Court ruling rejecting the request. Republicans who passed the law without Democratic support say it's a safeguard against fraud. Critics say it's a scheme to suppress voting among elderly, poor, disabled and young voters to gain an electoral advantage.

A Commonwealth Court Judge has granted troubled state Rep. Joseph Brennan's request to be removed from the Nov. 6 general election ballot. The unsigned order entered Thursday clears the way for Democratic Party officials in Lehigh and Northampton counties to find a replacement for Brennan, who announced Wednesday that he is not running for re-election. A three-term Democrat in the 133rd District, Brennan was arrested last week and charged with beating his wife and driving away drunk. The order gives state and local party officials until 4 p.m. Aug. 29 to submit the name of a replacement candidate to the Pennsylvania Department of State. Allentown Morning Call, Associated Press