Nexstar Broadcasting Corp. (NXST) plans to pull three local broadcast affiliates from Cable ONE because it will not agree to pay a new per-subscriber charge of $1.3 million over the next four years. Current carriage rights end on December 31.
"This is an unfair burden that would have to be passed along to our customers," said Tom Basinger, vice president of Cable ONE's central division. "Clearly, this is not fair to the consumer and it is a new charge that they are trying to force us to pay. Cable ONE will not consent."
Stations affected are KSNF (NBC) and KODE (ABC) in Joplin, MO, and KTAL (NBC) covering Texarkana, TX. "For Nexstar, Cable ONE subscribers represent a substantial percentage of the viewers for these stations," Basinger said. Basinger said,
"Given that local affiliate advertising rates are based on viewership, it's difficult to understand why Nexstar would risk the numbers our Cable ONE viewers provide in these regions -- particularly with the numerous high-profile national sporting events occurring at year-end and into January." He added,
"This is the first time Nexstar has indicated that it will not settle for any alternative other than money. In the past, Cable ONE purchased advertising from the stations, rather than for paying a fee for carriage rights." "If Nexstar pulls these stations, nobody wins," Basinger said.
"Our subscribers would lose ABC and NBC programming and the clear picture signal we provide when these stations are carried on Cable ONE." "We'd be very disappointed if we can't continue to carry KSNF, KODE and KTAL," he added. "We were planning to freeze our cable video rates in 2005, just as we did in 2003, so we simply cannot pay this unreasonable demand by Nexstar."
Since 1992, television stations have been authorized by the U.S. Congress to grant or deny permission for cable television systems to carry their signals. This right comes up for renewal every three years, with Nexstar's current agreement with Cable ONE expiring at the end of the year. "There doesn't appear to be any good reason why these charges should start now," Basinger said. "Cable ONE remains willing to continue the financial arrangements we've previously had with Nexstar, which involves advertising we place with the station. We can't imagine why they'd want to end that or lose our viewers." Cable ONE, the cable division of The Washington Post Company, operates 52 cable systems serving 720,000 subscribers in 19 states. Nexstar has indicated to Cable ONE that additional fees will eventually be charged for high-definition television (HDTV) broadcasts, although Nexstar does not currently offer the HDTV option.