The two television giants are locked in a contractual dispute in which Sinclair has threatened to pull its stations from Mediacom cable systems unless the company pays millions for the broadcaster’s services.
“You are paying Mediacom quite a bit of money every month in order to receive programming. Mediacom takes that money and uses it to pay the cable channels, such as Animal Planet, MTV and HGTV. We believe, and the ratings certainly support the view, that the programming broadcast by the Sinclair Stations, is much more important to you,” reads a letter from Sinclair to its station viewers.
Mediacom is the primary provider of cable services in Jackson and Macon counties, and it also serves the larger Hendersonville market. All told, there are 22 stations in 12 states serving approximately 700,000 customers that are affected by Sinclair’s dispute with Mediacom. The stations include ABC, NBC and CBS affiliates, more than half of which are also local news stations.
In October, a District Court in Iowa denied Mediacom’s motion seeking an injunction that would allow it to continue carrying Sinclair’s channels. This month, the same court denied Sinclair’s motion to delay proceedings in Mediacom’s antitrust lawsuit against the broadcast group. The suit alleges Sinclair violated antitrust rules by insisting Mediacom pay $1 million more than the company is willing to pay for Sinclair’s stations.
Mediacom in turn asked the Federal Communications Commission to order that Sinclair’s stations remain on the cable system. That order has not been made.
Consequently, several local governments in Western North Carolina — where viewers stand to lose their only local news station — have written to the FCC imploring commissioners to force the two companies to continue negotiations.
“We strongly urge the FCC to require Sinclair to grant Mediacom temporary consent to continue carrying this station so as to minimize the disruption that our consumers will otherwise incur through no fault of their own. We are very concerned that the FCC may not act on this matter before the December 1 deadline,” reads a letter from Sylva Mayor Brenda Oliver to FCC Chairman Kevin Martin.
Mediacom filed an appeal to the District Court’s original injunction denial that would have allowed the cable provider to continue to carry Sinclair stations until an agreement is reached. However, a release put out earlier this month by Sinclair vice president and general counsel Barry M. Faber says that based on the court’s scheduling order, it appears the appeal will not be heard by Dec. 1.
If no agreement is reached an no order issued by the FCC by Nov. 30, then on Dec. 1 Mediacom cable subscribers will have to go without their Sinclair stations or switch to satellite systems that carry the channels. Sinclair is encouraging customers to sign up with DirecTV, which will discount customers’ first 10 monthly bills by $10 each.
Neilson Media Research reports show that the number of cable subscribers marketwide already is on the decline. Although cable allows for customers to package services such as television with Internet and phone, satellite systems generally provide a larger channel selection for a lower price.
That price gap could widen. Mediacom’s Web site says that customers “will ultimately bear the cost and inconveniences” of whatever new agreement is reached.
Sinclair proposes another action. Cutting the channel lineup could reduce costs elsewhere for the cable provider, making payments to Sinclair have less of an impact on Mediacom’s bottom line and the price it charges customers Mediacom is the primary provider of cable services in Jackson and Macon Counties.
“Let them know that you would rather they use some of your cable fees to pay for programming you want, rather than for cable channels you likely never watch,” reads Sinclair’s letter to viewers.
Since Sinclair broadcasts at least one affiliate from all three of the major broadcast corporations, the company can boast NFL football, NCAA games, “American Idol,” “Grey’s Anatomy,” “Survivor,” “House,” “Desperate Housewives” and “24” as programming viewers may loose. Such shows draw viewers and ABC, NBC and CBS are at the core of any cable package.
“Although the Sinclair Stations are free to over-the-air viewers, Mediacom attracts and retains its paying subscribers by packaging together an attractive combination of programming choices including broadcast stations,” reads a list of Frequently Asked Questions on Sinclair’s Web site. “Without broadcast stations like the Sinclair Stations the package of channels that Mediacom has to sell would be less desirable and therefore less valuable. Mediacom makes more money by being able to include broadcast stations in its offering and like any business should pay to acquire such assets.”
Mediacom counters that the cable system is providing Sinclair stations with an audience and higher viewership numbers to appeal to advertisers.
“Programming is just fluff,” said Pat Acheson, director of studio operations and assistant professor in the department of Communication, Theater and Dance at Western Carolina University. “The whole point of programming is to deliver a specific audience to advertisers.”