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Spectrum dispute with Tribune could go from short skirmish to long war

January 9, 2019

Spectrum dispute with Tribune could go from short skirmish to long war

CLEVELAND, Ohio – Disputes between cable companies and program providers are typical this time of year. You know the routine: Contracts expire, channels get pulled from cale and satellite lineups, the two sides play the blame game, snarl at each other, and then, after a few days of escalating war talk, they reach agreement.

That’s the way these kinds of company-vs.-company dogfights typically go, but the dispute between Charter Communications’ Spectrum TV and Tribune Media is beginning to feel anything but typical. Entering its eighth day, this skirmish could be the one that escalates into a prolonged battle.

Tribune-owned WJW Channel 8, along with WGN America, got yanked from Northeast Ohio Spectrum lineups on Jan. 2, the day the two companies’ agreement expired. Since then, we’ve gone through a weekend that saw area Spectrum subscribers denied Fox coverage of an NFL wild card game.

Channel 8, a Fox affiliate, is carrying two playoff games this weekend: the Dallas Cowboys vs. the Los Angeles Rams on Saturday and the Philadelphia Eagles vs. the New Orleans Saints on Sunday. In other markets, Tribune has CBS affiliates, and that network also has two playoff games this weekend. And there’s doesn’t seem to be any substantive movement to resolve the impasse.

“We want to get it done,” said Gary Weitman, Tribune’s senior vice president for corporate relations. “But are we prepared for a long, protracted battle? If it has to be, sure, but it’s not something we want. We’ve been telling people, ‘You should prepare to make other arrangements for this weekend.’ ”

Other arrangements? Such as?

“We hear from people who are switching providers or getting antennas,” Weitman said. “We don’t believe that Spectrum is meaningfully engaged in negotiations, so it is serious enough that we’ve moved our message to Spectrum customers that they find other alternatives. We’re also encouraging Spectrum subscribers to ask for a refund for the programming they’re paying for and not getting.”

And that’s not just war talk. Antennas can be purchased to allow Northeast Ohio residents to receive local stations for free, and businesses that sell and install them are reporting an increase in sales after Saturday’s wild card game between the Cowboys and the Seattle Seahawks was unavailable to Spectrum subscribers.

“We’ve actually noticed an increase in demand for antennas over the last two years, but, yes, this has definitely increased interest from people in this area,” said Joel West, president of Cleveland Antenna Service, a Northeast Ohio company that has been installing antennas for residential and commercial customers for more than 55 years.

“Monday alone, we had about 20 calls from people wanting antennas.”

Bianca Jones with Best Buy public relations said that, recognizing the increased demand, “We want to help our customers watch their favorite television shows, so we have worked to increase inventory of TV antennas at our stores in Northeast Ohio.”

Instead of football, Channel 8 newscasts and Fox prime-time programming, Spectrum subscribers have been seeing messages stating the cable provider’s side of the battle.

“Spectrum has offered a fair proposal, with fee increases that are well above inflation and the cost of living for the same programming,” one such message reads. “We asked to extend the negotiations to reach a fair deal, keeping programming in place. We are very disappointed with their decision to pull their channels, which is negatively impacting our customers.”

Another tells Spectrum subscribers: “This is how Tribune Broadcasting operates. Driven by greed, they’ve pulled their channels from other distributors over the recent years as a negotiating tactic.”

It’s a standard tactic to focus blame on the other party, of course, but it’s a source of frustration to Tribune and its stations that Spectrum has an ongoing billboard to present its side, and that billboard is where their programming used to be.

“They control our channel placement, and they’ve used that to put a lot of misinformation out there,” Weitman said. “We’re not asking for anything more than what other providers pay us on a comparable basis. We’ve really tried to negotiate a fair deal, but it’s hard to get them even to engage on a meaningful level.”

Each side is blaming the other for being greedy, unreasonable and unfair. And Spectrum customers are caught in the middle. Tribune has 33 affected stations, and Spectrum, the nation’s second-largest cable company, has more than 16 million subscribers. If either side tries to depict this as David-vs.-Goliath showdown, it simply won’t wash.

“All I can say is that negotiations are ongoing,” said Bill Morand, Charter Spectrum’s regional director for communications. “I can’t really comment or speculate beyond that. We always want to provide the best product and lineup for customers, and we never want to see any unforeseen disruption.”

Some industry observers see shades of the government shutdown in the Tribune-Spectrum tussle as it enters its second week, and these shades shouldn’t have been unforeseen.

“Everyone is playing hardball these days,” Fordham University professor and media specialist Paul Levinson said. “One of things that President Trump has introduced to negotiations in other realms is that you have to be extremely tough and you don’t agree too quickly, and you make the other guy sweat and you make the other guy blink.”

Spreading to the private sector, this kind of confrontation could take weeks instead of days to resolve.

“I’ve been thinking for a while that, sooner or later, one of these battles was going to last a lot longer than two or three days,” Levinson said. “When you have this kind of atmosphere and this kind of disagreement happening so often, sooner or later the situation won’t be resolved quickly. And, if you think of this as the new culture, sooner or later it may not be resolved at all.”

It has, in fact, already happened. A battle that started last January between Starz and Altice’s cable systems, Optimum and Suddenlink, lasted about six weeks. And that was during the time that Starz’s most popular show, “Outlander,” was beginning its new season.

The war talk got ratcheted up Monday with the release of Tribune CEO Peter Kern’s open letter to Spectrum subscribers. He blasted Spectrum for presenting what he said was a distorted picture of negotiations. He also described Spectrum as “a huge Goliath of a company with over $43 billion in annual revenue and over $10 billion in annual profits.”

Pressure will be building on both sides to settle. Viewers and advertisers are making their concerns known to Channel 8 and Tribune.

“It’s not a tremendous hue and cry at this point,” Weitman said. “But we’d like to get this wrapped up. We’re certainly hearing from a lot of Spectrum subscribers, but that’s fine. That lets us know that our TV stations have a lot of value, and I know that WJW is a powerhouse station in Cleveland.”

Are viewers blaming Tribune, Spectrum or both?

“I think it’s a little of all three things,” Weitman said. “There are people who don’t care who is to blame. They just want their station back.”

For its part, Spectrum could be risking a jump in subscriber defection at time when the cable industry is coping with a “cut the cord” movement that’s sending customers to other providers, from dishes and antennas to streaming services.

“That’s what we’re trying to tell viewers at this point,” Weitman said. “There are a lot of ways to see our programming, and maybe you should be thinking of those alternatives.”

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