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Cox, Channel 8 dispute not resolved

Local cable viewers tuning into KLAS-TV Channel 8 Saturday morning to watch “Jack Hanna’s Into the Wild” didn’t see lions, tigers or bears.

Instead, they got a blackout screen accusing Channel 8 of “demanding a significant fee increase” and pulling the signal from subscribers to Cox Communications’ cable service.

That means neither side blinked ahead of Friday’s 11:59 p.m. deadline to forge a new distribution agreement, including the price Cox will pay for the CBS affiliate’s programming.

At 12:01 a.m., viewers watching “The Late Show with Stephen Colbert” saw a segment with comedian Jerry Seinfeld get cut short as the blackout screen came on.

The blackout means 48 percent of local TV households can’t watch CBS, which is scheduled to air Super Bowl 50 on Feb. 7.

Though representatives of both Cox and Channel 8 have said they’re hopeful they’ll reach a pact before the big game, each side seemed dug in late Friday and early Saturday.

Cox has mounted a broad social media and public relations campaign against Channel 8.

On top of the blackout screen’s statement, Cox is running ads on other cable stations blaming Channel 8 for the impasse. It’s paying to promote customer tweets critical of Channel 8. The cable provider also issued a press release Saturday morning accusing Channel 8 parent company Nexstar of refusing to change its offer in the last two weeks and seeking “a significant increase for its free over-the-air stations.”

Meanwhile, Channel 8 executives have openly advised Cox customers to cut the cable cord and sign up for satellite service, or use a high-definition TV antenna to get the station’s signal over the air.

At issue is the monthly fee per household that Cox pays Texas-based Nexstar for Channel 8’s content.

Station Vice President and General Manager Lisa Howfield said on Jan. 22 that local network affiliates across the country are woefully underpaid for programming. The industry has averaged less than $1 per household per month in past cable negotiations. That compares to $8 per household for ESPN, which has fewer local viewers.

TNT, which produces no local programming and airs repeats for most of the day, gets $1.65.

Broadcast stations generate about 35 percent of household cable viewing, yet get an average of 12 percent of total distribution payments, Howfield said.

Howfield said in a Friday email that it’s not Nexstar’s policy to “debate publicly with any of its commercial partners,” but Cox’s “egregious mischaracterizations” needed a public response.

Nexstar isn’t trying to triple the fee in its expired contract, but rather wants “economics slightly more than double the now extinct and very favorable rate that Cox negotiated over five years ago,” Howfield said.

And where Cox’s media campaign asserts that Channel 8’s fees should compare to what Nexstar agreed to in recent negotiations in other markets, Howfield responded that the Federal Communications Commission adopted rules in 2014 that prohibit Channel 8 from knowing the rates Cox set with other stations Nexstar manages.

With all of the back-and-forth, can threats of legal action be far behind?

Well, no.

Here’s Howfield on Friday: “Nexstar intends to pursue any and all methods of recourse to cause Cox to cease and desist making future mischaracterizations.”

Nexstar will also continue to “actively educate” TV viewers on alternatives to cable, Howfield said.

For viewers fretting over whether they’ll be able to see Super Bowl 50, take a deep breath: There is a recent precedent for resolution.

More than 3 million viewers in New York, New Jersey and Connecticut missed the first 15 minutes of the 2010 Academy Awards after a dispute between ABC and Cablevision forced a blackout.

The two sides rushed out a statement shortly after the ceremony began stating that they’d reached new terms, and the broadcast picked up just in time for the first awards.

Contact Jennifer Robison at jrobison@reviewjournal.com. Follow @_JRobison on Twitter.

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