Time Warner Cable and CBS Agreement

Time Warner Cable has agreed to carry CBS programming and extend its carriage of Showtime Networks programming through 2013. The portion of the contract, which includes the Showtime coverage, ended last year but was extended, as the CBS portion doesn’t expire until 2010.

The two companies agreed to a five-year contract, with CBS wanting to extend the Showtime coverage and Time Warner looking for VOD and cable features including Start Over and Look Back. Prime time programming from CBS and other video services including Start Over and Look Back will be included in Time Warner Cable’s enhanced video services.

President and CEO of CBS Corporation Leslie Moonves stated, “We are extremely pleased to have reached this agreement which recognizes the value of our programming to Time Warner Cable and its subscribers. The CBS Television Network and Showtime are an essential component of any meaningful programming lineup. We are pleased that Time Warner Cable and its subscribers will continue to enjoy our programming for many years to come.”

Melinda Witmer, EVP and Chief Programming Officer for Time Warner Cable added, “We are glad that we were able to reach an early renewal of our agreement with CBS and extend our relationship with Showtime. This new agreement represents an exciting expansion of our relationship with the CBS Corporation.”

According to Moonves, CBS will more than likely benefit from the deal with a $250 million profit. CBS was looking to earn about 50 cents per subscriber per month from Time Warner. Neither Time Warner Cable nor CBS have said, but there have been implications that at least some of the “bill” be paid in the form of ads on CBS stations.

According to Bernstein Research analyst Michael Nathanson, “The deal likely includes multiple components – including some cash and some advertising – and the compensation “paid” by the distributor likely covers Showtime and some incremental services.”