Comcast Corp. and Sinclair Broadcast Group Inc. are hammering out a long-term digital-HDTV carriage deal that could serve as "a template" for the rest of the cable industry, an official at the broadcast company told analysts last week.
The nation's largest cable company and Sinclair are in the process of finalizing an agreement in principle they previously reached that allowed Comcast to carry the Super Bowl XXXIX in the six markets where the broadcaster owns or operates a Fox affiliate. Those markets are Baltimore, Pittsburgh, Nashville, Richmond, Va., Charleston, N.C., and Paducah, Ky.
During a fourth-quarter earnings conference call, Sinclair CEO David Smith spoke in generalities when asked about the status of negotiations with Comcast.
Both Smith and a Comcast spokeswoman declined to comment on whether or not the MSO will be tendering cash to carry Sinclair's HDTV or digital signals.
"I'm just not going to comment on it … because I know Comcast's sensitivity to disclosing these kinds of things, and certainly it's not in our best interest to disclose anything, given that we'll be negotiating with 100 other cable companies — systems," Smith said.
In a letter to viewers, Sinclair said it wants "no more than 50 cents per subscriber" for its digital signals.
Sinclair owns, operates or provides sales services to 62 TV stations in 39 markets.
The Comcast spokeswoman said the digital-signal carriage deal it's finalizing with Sinclair is comparable to the pacts it has struck with other broadcasters.
During its conference call, Sinclair also voiced its support for Nexstar Broadcasting Group Inc., which has pulled the signals for several of its stations from Cox Communications Inc. and Cable One Inc. in a retransmission-consent dispute over cash for carriage.
"They deserve a lot of credit and I hope they succeed," Smith said. "I think [Nexstar CEO] Perry [Sook] is in a unique situation because he is using the opportunity that he has in small markets.
He added that he's heard some "staggering numbers" in terms of cable-subscriber defection to direct-broadcast satellite in the markets where Nexstar pulled its stations' signals.
He welcomed the entry of such telcos as Verizon Communications Inc. and SBC Communications Inc. into the video business, pointing out that markets will have four direct competitors — a cable company, a phone company and two DBS providers — all offering TV services.
"We think in the long term that's a good thing for the industry to have four competitors who want our product, and I think as those four competitors kind of carve up the marketplace, we've got to kind of stand in the middle and figure out how to take the best financial advantage of it that we can," Smith said.