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Sinclair sees resolution in CBS dispute with Fubo TV

The logo of Fubo TV appears on the marquee outside the Times Square studios of ABC television in New York City.
The logo of Fubo TV appears on the marquee outside the Times Square studios of ABC television in New York City. (Photo via LinkedIn, Graphic by The Desk)

The top executive at Sinclair Broadcast Group says a resolution between independent broadcast owners of CBS affiliates and streaming television service Fubo TV could come within the next few months.

The remark was made on a conference call with investors and reporters Wednesday after Sinclair released its recent quarterly earnings report.

On the call, Sinclair CEO Chris Ripley was asked for an update on the situation between the CBS affiliates, CBS parent company Paramount Global and Fubo TV that saw the removal of nearly 200 CBS affiliates from the streaming service last month.

Ripley, whose Sinclair owns a majority of the affected CBS affiliates, said a resolution was likely in the coming months, particularly as a carriage deal between independent CBS affiliates and streaming service YouTube TV is set to expire.

“I think this will eventually get resolved here in terms of Fubo,” Ripley affirmed on Wednesday. “YouTube, we’ll have to see, but my take on it is that it will be resolved at some point between us and the networks in the next couple of months.”

In late January, Fubo TV pulled the independent CBS affiliates after an agreement between the company and Paramount Global expired for the channels. A new agreement was reached between Fubo TV and Paramount for CBS-owned stations and Paramount-owned cable networks — which include Showtime, Comedy Central, MTV, Nickelodeon, TV Land and VH1 — but without a deal in place for the CBS affiliates.

For years, the CBS affiliate board allowed the network to handle digital distribution rights with virtual multichannel video programming distributors (vMVPDs) like Fubo TV and YouTube TV while they focused their efforts on traditional cable and satellite carriage agreements. CBS Corporation became Paramount Global shortly after the network’s merger with Viacom Networks.

Some of those carriage deals forged before the merger are set to lapse this year, with the Fubo TV deal being the first of the set. Paramount offered terms that were similar to the agreement reached with the CBS affiliate board several years ago, but the affiliate board turned down the proposal as the independent broadcast owners — which also include TEGNA, Nexstar Media Group, Cox Media, Gray Television, Hearst Television and Allen Media Group — wanted to reclaim negotiating power for themselves, presumably to seek higher fees for their channels.

“The CBS Affiliate Board unanimously believes that the offer CBS presented to the broadcast stations meaningfully undervalued the important local content that our stations provide,” Ripley said on Wednesday. “Fubo TV is also seemingly getting caught in the crossfire here, as it’s our understanding that they were not given the opportunity to negotiate with us directly.”

In an unusual twist, one CBS affiliate owner did approve Paramount’s earlier proposal. The owner, Allen Media Group, later said its approval was a mistake, and sought to rescind the deal.

Fubo TV subscribers — which pay some of the highest fees among streaming cable television replacements — aren’t having to do without CBS daytime, prime-time and news programming. Shortly after the affiliate feeds were pulled from the streaming service, Paramount Global stepped in to offer a national feed of CBS programming.

The national feed allows Fubo TV customers to watch and record national programs like “Let’s Make a Deal,” “The Price is Right,” “The Talk,” “CBS Evening News,” prime-time shows, late night talk shows and nationally-televised sports. The feed doesn’t include a subscriber’s local news programming or syndicated shows like “Wheel of Fortune” or “Jeopardy.”

Ripley suggested one way to resolve the issue might be legislatively, noting the disparity between how cable platforms are regulated compared to the streaming services that are increasingly replacing them.

“There’s a growing consensus within the broadcast community, and also within D.C., that this situation with the virtuals, it needs to change,” Ripley complained. “It really is not consistent with the way the industry is set up and the way market power should be used.”

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).