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Les Moonves: ‘Never in my most pessimistic moments’ Could I Have Predicted TWC Stall

This morning the CBS Corporation announced a deal with Verizon Fios to extend their retransmission consent agreement, and to add CBS Sports Network to a lower tier. Following the announcement, CBS CEO Les Moonves sent a note to staff applauding the deal, and sharing some new thoughts on the Time Warner Cable situation.

That memo, which was obtained by TVNewser, shows frustration on the part of Moonves with TWC, and also sheds some light on what may be a sticking point between the two companies.

I cannot describe to you the frustration I feel at the way these negotiations have gone. Never in my most pessimistic moments did I ever think that they would have lasted this long and have been so difficult. In many aspects of the deal, Time Warner Cable is demanding different terms than any other company in the business. I am frankly mystified by what appears to be a lack of urgency to resolve this matter for their customers.

Still, we’ll keep talking. Today’s announcement makes clear, however, if there was ever any doubt, that we are prepared to move decisively and thoughtfully to achieve a good conclusion for all parties involved in these kinds of negotiations. When Time Warner Cable is ready, we’ll be there.

Earlier on in the memo, Moonves makes a point of noting that CBS is retaining its online streaming rights as part of the Verizon deal. Time Warner Cable meanwhile has aggressively pushed to make all TV content available on any platform. It has an app for iOS and Android that features a slew of live TV channels and on demand content, including content from CBS. CBS wants to retain digital rights so it can sell them, but TWC argues that when it pays millions to the content owners, it should be able to distribute it any way it pleases. Whether CBS or TWC caves is the big question.

Earlier today, the companies agreed to return channel two to the TWC lineup for the New York City candidate debates.

Moonves letter:

I am pleased to inform you that today we signed a three-year content carriage agreement with Verizon for its FiOS systems across the country. This important deal was reached swiftly and amicably in just a few days after our conversations began. In it, we achieve fair value for our over-the-air rights, while preserving our streaming rights as well. CBS content will be available to 100% of all Verizon FiOS customers, and we will grow as they do. Our CBS Sports Network will be available on a broader tier, which will add millions of subscribers to that growing business. In short, this is a great deal for CBS and for Verizon, which has 5 million subscribers, the majority in New York, Los Angeles and Dallas.

Those cities may seem familiar to you as you follow our situation with Time Warner Cable. They cover almost precisely the same territory, but Verizon has more subscribers in those markets, where we are now blacked out by that cable company for going on three full weeks now. You should know that Time Warner Cable has been offered almost exactly the same deal for CBS carriage to which Verizon has agreed.

I cannot describe to you the frustration I feel at the way these negotiations have gone. Never in my most pessimistic moments did I ever think that they would have lasted this long and have been so difficult. In many aspects of the deal, Time Warner Cable is demanding different terms than any other company in the business. I am frankly mystified by what appears to be a lack of urgency to resolve this matter for their customers.

Still, we’ll keep talking. Today’s announcement makes clear, however, if there was ever any doubt, that we are prepared to move decisively and thoughtfully to achieve a good conclusion for all parties involved in these kinds of negotiations. When Time Warner Cable is ready, we’ll be there.

Congratulations to our great negotiating team on this terrific agreement with Verizon, and thanks to you all, as always, for your support.

Leslie

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