CBS and Time Warner End Dispute, Bring an End to CBS Blackout

The one-month blackout of CBS in eight major U.S. cities has finally ended. USA Today confirms that CBS Corp. reached a new broadcasting rights agreement with Time Warner Cable, signaling an end to the CBS blackout. 

CBS returned to affected viewer's TV screens at 6:00 p.m., ET on Monday evening. The companies did not share the terms of the new retransmission contract, which denotes how much money Time Warner pays CBS for the rights to carry CBS-owned television stations. 

CBS CEO Leslie Moonves sent an e-mail to the company's employees that suggested that Time Warner finally capitulated to CBS' demands. "The final agreements with Time Warner Cable deliver to us all the value and terms that we sought in these discussions," Moonves wrote in the e-mail. "This has been a difficult time for our viewers and for CBS. I am glad it's behind us. It's good to be back."

The new contract includes broadcasting rights of the cable networks owned by CBS Corp, including Showtime, the Smithsonian Channel and CBS Sports Network. 

The companies' retransmission contract expired at the end of June, and the deadline for a new deal kept getting delayed. On Aug. 2, Time Warner dropped CBS and its networks after they were unable to reach a contractual agreement by the 5 p.m. deadline. Almost immediately, more than 3 million Time Warner cable customers in New York, Los Angeles, Dallas, Boston, Pittsburgh, Chicago, Detroit and Denver were denied access to CBS, Showtime, and local CBS-owned stations until yesterday evening. CBS-affiliate stations owned by other broadcasting companies were not affected by the negotiations or the blackout. 

CBS said that it deserved to be paid more for its programming, given their host of popular shows. Time Warner asserted that CBS' shows were available for free over the air and offered to carry CBS stations to subscribers on an a la carte basis if an agreement was not reached. 

On Aug. 5, Time Warner released a statement written by Time Warner Cable CEO Glenn Britt to Moonves, which proposed to accept the terms Time Warner "reluctantly agreed to" if the terms of the old contract remained intact. Yet, CBS said it wanted to retain the ability to issue streaming rights to online companies like Netflix. 

Time Warner agreed to give CBS the compensation that the network desires for their programming, and it is suggested by Moonves that the agreement goes for streaming rights as well. 

"We are receiving fair compensation for CBS content and we also have the ability to monetize our content going forward on all the new, developing platforms that are right now transforming the way people watch television," Moonves wrote Monday.

CBS is certainly a lucrative station for TWC. The network, which airs shows such as "NCIS" and "The Big Bang Theory," has generated $250 million in retransmission revenue last year, and expects to reach over $1 billion by 2017. 

"We're pleased to be able to restore CBS programming for our customers, and appreciate their patience and loyalty throughout the dispute," said Britt in a statement. "While we certainly didn't get everything we wanted, ultimately we ended up in a much better place than when we started." 

In his statement, Britt also urged for a change to the 1992 retransmission consent rules. "We sincerely hope that policymakers heed that call and take action to prevent these unfortunate blackouts soon," he said.