The Media Equation: Time Warner and CBS, Fighting for Themselves

It’s a significant inconvenience for viewers, but it is not the only irritation in the by-now-familiar rumbles between the companies that own the pipes and the companies that make the programming that goes into those pipes.

While it may be disappointing that some of us will miss a rerun of “Dexter” on Showtime, which is owned by CBS, or the network’s summer hit “Under the Dome,” what makes it worse is the suggestion by both sides that they are only trying to stick up for us. Blacked-out Time Warner Cable customers were confronted by the following propaganda on their screens:

“The outrageous demands from CBS, the owner of Showtime and TMC, has forced us to remove it from your lineup while we continue to negotiate for fair and reasonable terms.”

“Forced us ...” Really, Time Warner Cable? It seems more like the business negotiation you were having with one of your suppliers did not yield the desired result and you’ve chosen to turn up the heat.

Not to be outdone, a statement from CBS made sure everyone understood that the network was really doing the people’s work in responding to the news:

“CBS remains resolute in the pursuit of fair compensation for our programming and will use the full resources available to us to make sure that Time Warner Cable subscribers are aware of its shortsighted, anti-consumer strategy.”

There’s more where that came from — “disinformation,” “voodoo mathematics” and “wildly inflated percentages” — but you get the idea.

Here’s an idea for both parties: Leave us out of it.

We know that you are fighting over lucre, not our inalienable rights as cable consumers. Pretending that you are fighting on our behalf rather than in the interests of your shareholders and executives is infantilizing and unbecoming. CBS is coming off another record year, Time Warner Cable’s stock is storming along, and the fight over retransmission fees is about how the pie is sliced, nothing more.

We have all grown used to the respective parties turning programming on and off as the negotiating table requires, but your bombast is tired, your motives are transparent and it’s clear that the public dimensions of this business conflict are far down the list of priorities.

Writing in the comments section accompanying the news in The New York Times, one reader spoke for many of us:

“These games of chicken are depressingly common among cable companies and networks across the country — made all the more obnoxious by the marketing spin from both sides intended directed at customers they assume to be economic illiterates. They are nothing more than battles between media behemoths over who can stick their hands deeper into the pockets of the remaining viewers beholden to their dying business models.”So, as you were, guys. Continue to bash in each other’s heads all you want. Just don’t pretend this is a noble crusade for the consumer.

After a Fee Dispute With Time Warner Cable, CBS Goes Dark for Three Million Viewers

CBS stations went black just after 5 p.m. Eastern time. Both sides then issued statements blaming the other for being unreasonable in the negotiations, which were extended from Monday.

The dispute centers on what are known as retransmission fees, which cable companies have increasingly been compelled to pay to broadcasters, despite vigorous protest. CBS’s president, Leslie Moonves, has been a leader in seeking retransmission fees for broadcasters.

The decision to black out the stations means that Time Warner Cable subscribers will not be able to watch CBS programming until a deal is reached. In the past, subscribers have reacted with anger at such suspensions, but generally because they have missed specific programs. In this case, the summer programming roster does not contain many highly popular shows that might drive a settlement. CBS’s biggest appeal this summer is from the show “Under the Dome,” which will not have a new episode until Monday.

But the network does have the P.G.A. golf championship coming in a week. CBS emphasized on Friday that this week’s P.G.A. event was being led by Tiger Woods, who always draws viewers. And CBS, which broadcasts two soap operas, is also likely to gain support from those viewers.

Further down the road is the N.F.L. season, which might be a driving factor in why Time Warner Cable acted now.

Richard Greenfield, a media analyst who follows the company for BTIG Research, said the cable company was in “a once-in-a-lifetime position” to fight this battle because at the moment it does not face the overwhelming leverage of N.F.L. games and the most popular prime-time shows.

In addition, two top series on the Showtime network, owned by CBS, “Dexter” (which is in its final season) and “Ray Donovan,” are now also off the air, even though customers pay a separate fee for them. Time Warner Cable said it would offer a rebate to Showtime subscribers, as well as access to other subscription channels like Starz.

Time Warner Cable has insisted that the fee increases that CBS is asking for are unreasonable; CBS has argued it provides far more value than many cable networks that require much higher fees. Some reports have said CBS is asking for an increase of about 100 percent, to $2 a subscriber, from $1.

A spokesman for the Federal Communications Commission said that the agency was disappointed that the companies had not reached an agreement. “We urge all parties involved to resolve this situation as soon as possible.”

Despite recriminations on Friday from both sides, the negotiations are expected to resume as soon as Monday. That does not mean a quick settlement is likely, however. Mr. Greenfield said he could foresee CBS’s being dark “six weeks, if not more.” An executive close to the CBS side of the talks predicted 10 to 14 days.

In the meantime, CBS is sending messages on the radio and through other outlets urging viewers to complain to Time Warner Cable. The cable company, for its part, was telling customers to buy an antenna or sign up for Aereo, the new service that offers broadcast signals, and was also urging its customers to watch the missing CBS shows through streaming Web sites.

But for customers with Time Warner Cable broadband on Friday, CBS.com was blocking the streaming of shows, instead posting messages.

In almost every previous showdown over retransmission fees, the cable company’s stand has crumbled in short order. Mr. Greenfield said this time could be different because Time Warner Cable could take steps like appealing to Congress and selling CBS’s channel position to another bidder.

CBS stressed that it had never been taken off the air in a retransmission dispute and that it had not stopped offering extensions to keep the talks going.

Maureen Huff, a spokeswoman for Time Warner Cable, said, “We’ve accepted numerous extensions at this point, but it’s become clear that no matter how much time we give them, they’re not willing to come to reasonable terms.”

Brian Stelter contributed reporting.

This article has been revised to reflect the following correction:

Correction: August 2, 2013

Because of an editing error, an earlier version of this article misstated at one point which company suspended the service. It was Time Warner Cable, not CBS.

CBS in Contract Showdown With Time Warner Cable

That would mean that viewers in those cities involved in such ongoing summer shows as “Under the Dome” and “Big Brother” would not be able to see them if they were subscribers to Time Warner Cable. In addition, the CBS-owned cable network Showtime would probably also go off the air on the systems in those cities, leaving fans of shows like “Ray Donovan” without a way to see the initial showing of new episodes.

CBS executives charged that Time Warner Cable has refused its request to extend the current contract between the parties, precipitating the confrontation. The contract ended in June, and the two sides did agree to an extension that will end next Wednesday. None of the financial terms of the dispute have been disclosed.

CBS’s plan is to create pressure on Time Warner Cable by inciting its subscribers to complain about the prospect of losing CBS programs, and suggesting ways those subscribers can find alternate options to find CBS shows “on Time Warner Cable’s competitors,” as CBS put it in a statement.

The CBS statement also said, “Time Warner Cable is planning to drop the most popular programming in its entire channel lineup because it won’t negotiate the same sort of deal that all other cable, satellite and telco companies have struck with CBS. Time Warner Cable has dropped nearly 50 channels in the last five years. CBS has never been dropped by a cable company before. CBS remains committed to working towards a mutually agreeable contract.”

The move is similar to previous examples of brinkmanship exercised by networks in the midst of a negotiating impasse with a cable company. In several previous instances, cable companies have gone to the point of allowing networks to be blocked on their systems, precipitating outraged complaints from subscribers.

In general, the networks have had the leverage in these disputes because they have programs viewers want to see and those viewers are paying cable companies for the right to watch television.

But cable outlets have shown increasing resistance to demands from network for higher fees for what is known as retransmission consent. Cable companies must gain permission from stations to retransmit the broadcast signal to their subscribers. The fees, once modest, have grown in recent years and CBS has been among the most aggressive of the networks in seeking sizable increases.

Time Warner Intends to Move to Planned Skyscraper at Hudson Yards

The company would move to an 80-story skyscraper to be built as part of the Hudson Yards project, at the rail yards at 10th Avenue and 33rd Street, once an industrial neighborhood of warehouses, factories and tenements.

If it is approved by Time Warner’s board this month, the deal will be a coup for Related Companies, the developer of the 26-acre Hudson Yards project as well as the Time Warner Center, which combines a hotel, condominiums, luxury retail and office space at Columbus Circle.

At the same time, an investment group led by Related is expected to pay Time Warner about $1.3 billion for the company’s space at the two-tower Time Warner Center complex. Under that agreement, Time Warner would lease its space at Columbus Circle for about five years, or until the new tower was completed. Related also plans to move its office to Hudson Yards from the Time Warner Center.

Time Warner’s brokers, Douglas Harmon and Amy Spies of Eastdil Secured, have lined up a second buyer for its current space in case the company is unable to complete a final agreement with the Related group.

“They’ve found a new home,” said one executive who had been briefed on the Time Warner deal but was not authorized to discuss it, “and they found a winner for the old home.”

In the West Side deal, Time Warner would buy more than half the space in the 2.4-million-square-foot Hudson Yards tower, presumably to be renamed Time Warner Center. Time Warner, which is in the process of spinning off its magazine portfolio, Time Inc., would move its executive suite to the new tower along with its HBO, Turner Networks, CNN and Warner Brothers holdings.

Executives involved in the deal were reluctant to discuss it because the final papers had not been signed. But word of the pending deal has been coursing through the real estate industry.

Earlier this year, Related started work on a 47-story office tower in Hudson Yards, at the northwest corner of 30th Street and 10th Avenue, which will be home to Coach, the luxury retailer; L’Oreal USA, the beauty products company; and SAP, the software company.

But it needed a corporate anchor for the second, larger tower to build the rest of the multiblock site on a platform over the rail yard between 10th and 11th Avenues. The new complex would comprise the two office towers, a glass-walled luxury mall between them, a cultural institution, a 72-story residential building and a 60-story mixed-use tower with a hotel, office space and condominiums at the top.

Related has been willing to sell its office space at cost to lure Time Warner, one of the few corporations in the market for new space, and get the rest of the complex under way. The developer expects to make money on the retail and residential portions of the project.

Related and its partner, Oxford Property Group, are now betting that Time Warner’s move to Hudson Yards will establish the area as a new commercial district, much the way the company transformed Columbus Circle when it moved there a decade ago.

Related is currently building a residential building nearby and closing on a separate parcel at 33rd Street and 11th Avenue. It also has the rights to build over the adjacent rail yard between 11th and 12th Avenues.

At the same time, Related expects that companies will leap at the chance to pay a premium for the old Time Warner office space at Columbus Circle, and presumably, the opportunity to put its own name on the high-profile complex.

But large companies have moved cautiously in the current market, making many developers squirm.

Jeffrey L. Bewkes, Time Warner’s chairman and chief executive, first signaled his plans in 2011 to consolidate the company’s operations in a modern, highly efficient, albeit less luxurious, tower by 2017, when many of the company’s leases expire.

Time Warner hired the brokerage firm Studley to look for a new home, touching off a frenzy among the city’s top developers, including Boston Properties, Extell Development and Brookfield Properties.

Warner Brothers Announces New Studio Leadership

LOS ANGELES — Warner Brothers on Monday announced a new leadership team at the studio, while sending employees an e-mail that said Jeff Robinov, who has been president of the motion picture group, “will no longer serve” in that position.

The company’s public announcement said responsibility for the movie group will be divided among Sue Kroll, who will be president of worldwide marketing and international distribution; Greg Silverman, who will be president of creative development and Worldwide Production; and Toby Emmerich, who will continue as president and chief operating officer of New Line Cinema, while adding responsibility for the Warner theater operations.

The new lineup will report directly to Kevin Tsuijihara, who is chief executive of the studio, which also includes an extensive television and home entertainment operation.

The company’s internal e-mail stopped short of saying that Mr. Robinov would leave the company; his departure has been widely expected since Mr. Tsujihara won the chief executive’s post after an internal competition. But associates of Mr. Robinov said last week that he might surface at another Hollywood studio, if he managed to exit contractual arrangements that tie him to Warner.

The shake-up follows the exit of Bruce Rosenblum as the president of Warner’s television group, and leaves Mr. Tsujihara, who took the chief executive’s post in March, replacing Barry Meyer, with a field that is cleared of his former competitors for the top job. He also has a management structure that is spread, in both movies and television, among lieutenants who had been overseeing operations under Mr. Robinov and Mr. Rosenblum.

Time Warner Revenue Is Flat, Despite Cable Gains

The parent company of HBO, CNN, TNT and TBS reported revenue of $6.9 billion in the quarter that ended March 31, down 1 percent from the same period last year. Net income grew 23.5 percent to $720 million, or 75 cents a share, compared with $583 million and 59 cents a share in 2012.

“We’re off to a strong start in 2013, making us even more confident in our full-year outlook,” Jeffrey L. Bewkes, chairman and chief executive of Time Warner, told analysts. He specifically pointed to the success of the company’s cable TV business, driven this quarter by an average nightly audience of 10.7 million for the N.C.A.A. basketball tournament broadcast on several Turner channels.

But Time Warner’s legacy businesses continued to lag. Later this year, the company is expected to complete the spinoff of its Time Inc. publishing unit into a separate, publicly traded company. Revenue at Time Inc., which publishes Time, People, Sports Illustrated and InStyle, fell 5 percent to $737 million, reflecting an 11 percent dip in subscription revenues.

Time Inc. eliminated roughly 6 percent of its total worldwide staff of 8,000 in the first quarter, resulting in $53 million in restructuring and severance charges. “We remain very focused on taking costs out of the business,” said John K. Martin, chief financial and administrative officer at Time Warner. Cost cutting, he added, is “an important step in preparing Time Inc. to function as a stand-alone public company.'’

Revenues at the Warner Brothers studio fell 4 percent to $2.7 billion, while operating income increased by 23 percent to $263 million. “Both ‘Gangster Squad’ and ‘Jack the Giant Slayer’ fell below our expectations,” Mr. Bewkes said.

He remained optimistic about the studio’s slate of upcoming films, including “The Great Gatsby” and “The Hangover Part III.” Warner Brothers had a strong television season with “Revolution,” an apocalyptic drama on NBC, and “Game of Thrones,” the HBO fantasy series that averages 13.4 million viewers per episode.

Mr. Bewkes defended CNN under the leadership of Jeff Zucker, the recently named president of CNN Worldwide. But, he said, the channel still needed to evolve from a trusted source of breaking news to a more regularly watched outlet. “CNN can’t just be politics and wars,” Mr. Bewkes said.

He rebuffed questions about whether the HBO Go on-demand app would be made available on an à la carte basis through a broadband connection, making the premium cable channel more like the streaming service Netflix. “We would do it if we thought it was in our economic best interest,” Mr. Bewkes said. “At this point, we don’t think it makes sense.”