Please See 12/01 Update With More Info
My last post on this topic garnered quite a few comments. Geoff commented with some actual numbers about the deal:
Okay, some more details, from somebody who helped negotiate the deal:
Sinclair is asking for about $1/month plus $40M-$60M up front for 3 years (about $5-$7/month per subscriber).
Mediacom agreed to pay Sinclair whatever they have paid other broadcast companies or whatever Sinclair has received from other cable companies in the past four years. Sinclair insisted on more. They wanted $1 million dollars over the highest deal of any market, for all 22 Sinclair stations carried by Mediacom, regardless of the size of the individual market. That is to say, they want $1 million dollars more than the deal for the largest market, but for each individual market, including the small ones. So, essentially, they’re being really greedy. They’re wanting many millions more than any comparable deal between any broadcast company and cable company.
That’s exactly the sort of information needed to determine which company is being greedy. From those numbers, we can fairly reliably guess that Sinclair is mostly to blame here. I had a Mediacom employee contact me the other day with some more numbers. He’d like his identity withheld, so I will summarize the information he provided.
Basically, Mediacom offered to match any deal Sinclair has made with other cable providers (like Comcast). Sinclair refused that offer. Then, Mediacom offered to match any deal they’ve done with other stations (over 400 other stations). Sinclair also refused that offer.
So, Mediacom has made multiple attempts to strike a deal with Sinclair. Sinclair seems unwilling to take anything less than what they’re asking.
I’ve got one more neat little bit of information, an audio recording of Sinclair CEO David Smith basically explaining why Mediacom customers aren’t important to Sinclair. David Smith says the affected markets are menial to Sinclair’s operations. Their thought process is that the market is so small, Sinclair won’t take much of a hit, Mediacom will end up losing customers.
Download Sinclair CEO MP3 or Play:
[audio:http://www.longren.org/files/DavidSmith.mp3]
So there you have it. Mediacom is doing the right thing, protecting their customers from charges they shouldn’t have to pay. Sinclair is pretty much trying to make us pay more money for a channel we can all receive for free, over the air. Kudos Mediacom, you’ve really come through on this whole thing. I think the general public is siding with Mediacom more so than Sinclair now too, good for Mediacom. Sinclair can go to hell. I’m gonna go get some bunny ears tonight, I’m not switching any of my services away from Mediacom. If you Mediacom customers in Des Moines and Cedar Rapids/Iowa City want to continue getting KDSM and KGAN, go get a pair of bunny ears too!
In other Mediacom related news, I heard there may be another free internet speed upgrade coming. I don’t remember where I heard it but supposedly Mediacom will be increasing it’s default upload rate from 256kbps to 512kbps. That would be stellar, because when I download at my full 5Mbps, all of my upload is used also. Need more upstream!!!
Anyway, thanks again Mediacom. I have a renewed faith in you. If you’re interested, here’s a little article at Reuters about the Mediacom and Sinclair issue.
Well, now what?
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Another update, Mediacom reached a deal to carry WHBF out of Rock Island (IL/IA border) in place of KGAN as of today, so Sinclair caved and decided not to pull out of negotiations. Sinclair will postpone removing KGAN until January 2nd, hoping to continue negotiations. Mediacom has the upper hand now. If they do indeed replace KGAN with another CBS affiliate, this will essentially destroy KGAN, because a huge chunk of their viewer are Mediacom subscribers. Sinclair has no choice but to decrease its asking price. This will still mean a rise in cable rates, as Mediacom was not previously paying for Sinclair broadcast stations at all, but Mediacom should be able to minimize it.
Thanks Geoff! I just read this over at TV Technology. Supposedly Sinclair is going to let Mediacom broadcast their channels until early January. That’s explains why KDSM Fox 17 is still working for me at home.
I was stunned by the comments David Smith was making about Mediacom customers. He should be shot in the kneecaps.
A couple of things need correction…
#1 Your comments about Mediacom getting CBS signals from another affiliate are off-base. Each affiliate pays their network cash money for the exclusive rights to the programming in a specific geographical area. Cable companies cannot go to another provider if they refuse to pay the price the TV stations set for coverage. If the talks break down, Mediacom cannot go to another station for coverage. Please check the FCC website on must-carry rules for more information on this.
#2 You’re right that it’s about greed…but there’s enough to go around on all sides. The truth is that the viewership for the Sinclair stations is higher than any of the cable channels that Mediacom pays far more to carry…so who’s being greedy? Sinclair is just asking for parity based on viewership value.
The statement that Sinclair’s asking for far more than any other station…do we have dates and amounts? No. Most of the other stations don’t have their contracts up until later this year, so the amounts that Mediacom has paid would be much lower…but likely will increase this year. CBS is already eyeing a hefty pricetag for cable and satellite this year. Cox has had to pay a lot more as well for locals! It’s not one-sided!
MediaCom will be adding the Quad Cities CBS affiliate in Iowa City. Iowa City falls into an FCC overlap coverage area, and therefore MediaCom has the choice of which one to carry. They are not able to add it to Cedar Rapids for the FCC reasons that you reference above.
It’s time for Sinclair to wake up. If they want to increase their revenue, it should come from advertisers not the viewers. If Sinclair does not understand this, then it is time to boycott their advertisers.
I am currently a subscriber of Directv. Before that, I was a customer of Dish Network. Sinclair did the same thing to Dish as they are now doing to Mediacom. Dish caved in to their extortionist tactics. Now Mediacom is their victim. There is no doubt that Directv will be on their hit list now. I wish they would all band together and boycott Sinclair. It would be worth having to use an antennae for a while if I could see Sinclair get a dose of their own medicine
re: internet speed upgrade – as of 1-16-07, I think it’s already happened. I did a quick speed test and it appears that the default speed of 5 Mbps has been upped to 8 or 9 Mbps.
You’re right Jason. We are now getting 8Mbps instead of the previous 5. I started getting 8Mbps down/512Kbps up on December 20th. It’s very nice.
I know Random Person doesnt speak highly of myself, but I have my reasons of keeping my name unidentified. I’d like to say that Employee’s are holding their ground agains the upset customers and relieving some much needed confidence that it will be taken care of soon.
However, to comment on the rebroadcasting or the go to another provider.
To Gary: Please also see that, that clause is focused on any new providers that the company doesnt already have a network contract with already. Meaning, if Mediacom has a contract with the Fox affiliate out of Chicago, they may rebroadcast it with permission from the network. This is currently being done in Pontiac, IL. (For example only)