Time Warner Gains-But CBS Gains More-as Deal to Restore Programming Reached

In the Door’s song “the End,” Jim Morrison sang about wanting to kill his father. After today’s deal between CBS (CBS) and Time Warner (TWX) that restore CBS programs to subscribers, T.V. viewers might no longer want to kill their cable provider.

Getty Images

The Wall Street Journal explains what happened:

Time Warner Cable and CBS Corp. announced a new accord on the fees that the cable operator will pay to carry CBS programming, ending the blackout at 6 p.m. Eastern time. Terms of the agreement weren’t disclosed.

“We are receiving fair compensation for CBS content,” CBS Chief Executive Les Moonves said in a note to employees.

Time Warner Cable Chief Executive Glenn Britt said that “while we certainly didn’t get everything we wanted, ultimately we ended up in a much better place than when we started.”

The fact that terms weren’t disclosed hasn’t stopped analysts from speculating about what it might look like. B. Riley & Co.’s analysts offer their view:

While economics were not disclosed, we believe CBS did bend slightly on its demands for $2/sub/month, (which would have been a 300% hike in fees), and agree to between $1.50 – $1.75/sub, depending on the DMA. In turn, we believe TWC agreed to give up any streaming economics which currently CBS currently books on library product from its various deals with OTT providers, (examples – Cheers, Everybody Loves Raymond, Hawaii 5-0, Twin Peaks, CSI Miami, etc.).

Wunderlich’s Matthew Harrigan offers his thoughts:

CBS likely secured a monthly fee not quite immediately in line with its $2 monthly target, but likely to eclipse that threshold near the end of the five- to six-year deal term. The CBS network was back on 6pm Monday, in time for Gino Smith’s likely debut as starting quarterback for the New York Jets. CBS CEO Les Moonves did suggest to staffers that CBS now has latitude to secure domestic subscription VOD deals for CBS and Showtime, including Showtime Anywhere, significant positives for monetizing digital platform carriage. TWC CEO Glenn Britt is suggesting that the MSO was successful in somewhat moderating CBS’s more extreme demands.

The analysts sound as if they believe CBS got the better of the deal-and the market appears to agree. Shares of CBS have gained 3.7% to $53.00, while Time Warner has gained 1.1% to $61.19. Shares of Disney (DIS) are little changed at $60.81, while shares of Cablevision Systems (CVC) have dropped 0.3% to $17.69.