Buckeye offers viewers credit

Cable company, broadcast firm continue talks over Channel 24

1/16/2014

Buckeye CableSystem will give its Toledo-area customers a small credit each month until the cable television company and Sinclair Broadcast Group Inc. agree on a new contract that allows Buckeye to resume carrying programming for WNWO, Channel 24.

Sinclair ordered Buckeye CableSystem to stop retransmitting the NBC affiliate when the previous contract expired on Dec. 16. Under federal law, Buckeye cannot pick up WNWO’s broadcast signal and send it to cable customers without WNWO’s permission.

Buckeye officials believe the credit to customers is “a recognition that what’s fair is fair,” said Jeff Abbas, president and general manager of Buckeye CableSystem.

Under the expired contract, Buckeye was paying about 24 cents per customer per month to send WNWO’s signal. So roughly 110,000 Toledo-area customers will get a credit of 24 cents a month. In their February bills, customers will get a 24-cent credit for January, plus a 12-cent credit for the second half of December. Buckeye says the credit will cost the firm $26,400 a month.

The Blade and Buckeye Cable-System are both owned by Block Communications Inc.

The disagreement between Buckeye CableSystem and Sinclair seems to come down to money.

Buckeye officials said Sinclair is seeking more than $2.8 million a year for the retransmission rights. They said Buckeye paid just over $350,000 to carry WNWO in 2013. Most of that went to Barrington Broadcasting Group LLC, which sold WNWO to Sinclair in November.

The cable company argues that WNWO’s viewership is much lower than the other Toledo TV stations and doesn’t warrant a big fee increase.

Barry Faber, a Sinclair vice president and general counsel, said his company has “a slightly different perspective. What Buckeye wants to do is to focus solely on the other local stations in the market.”

“Buckeye wants to say we’re this low-rated channel, and admittedly WNWO is not one of the top broadcast stations in Toledo, Ohio,” Mr. Faber added.

But he said even the third or fourth-ranked local station gets much higher ratings than some cable-only stations such as ESPN and the Disney Channel, stations that Mr. Faber said cable companies pay big money for but which he claimed some viewers never watch.

Mr. Faber said the latest edition of the Hollywood Reporter, a trade publication, said that the average cable company pays ESPN $5.50 a month for each subscriber, while TNT gets $1.33 and the Disney Channel $1.15.

“We look at the whole market, and we look at what we think is a fair payment based on what we believe they pay the other stations,” he said.

Buckeye officials said that comparison isn’t fair because ESPN, TNT, and the Disney Channel provide content that isn’t available elsewhere. WNWO’s programming is available online and is free over the air.

Buckeye has been publicizing ways its customers can continue to watch WNWO. Ron LaBeau, Buckeye’s director of sales and marketing, said the company has given away more than 6,000 antennas to customers so they can get WNWO’s signal on digital televisions.

“We’ll even send somebody out to help customers set them up,” Mr. Abbas said.

Both sides said they welcome continued negotiations.

“The way I see it is that this is just a simple business negotiation,” Mr. Faber said. “We’re the wholesaler, and Buckeye is the retailer. We’re negotiating. We’ve never said this is the final price.”

Mr. Abbas said higher fees charged by station owners will be passed on to subscribers, so Buckeye does its best to negotiate the lowest possible fee for all the stations it airs.

“We’re looking for a middle ground where both sides can win,” Mr. Abbas said. “We know customers are frustrated.”

Mr. Abbas said he hopes that a couple of upcoming “catalysts” will spark further discussions. One is the upcoming television sweeps month that begins Jan. 30. Ratings during the sweeps period help determine advertising rates that TV stations can charge.

Another catalyst is the Winter Olympics in Russia, which run from Feb. 7-23. The Olympics will be broadcast on NBC, but extensive coverage is also planned for USA network, MSNBC, CNBC, and the NBC Sports channel. NBC’s coverage also will be available at nbc.com.

Contact Chip Towns at: ctowns@theblade.com or 419-724-6194.