A rate dispute between Cox Communications and Nexstar Broadcasting has resulted in five local broadcast stations being blocked to the majority of cable TV viewers in Baton Rouge and Lafayette.
The five South Louisiana stations owned by Nexstar that are blocking their signals from being aired over Cox are: WGMB-Fox 44, the Baton Rouge Fox affiliate; WBRL, the Baton Rouge CW station; KLAF-NBC, the Lafayette NBC affiliate; KADN (Fox 15), the Lafayette Fox station; and My Network TV Acadiana.
The five channels went off Cox at 11:59 p.m. Friday because of a battle over how much Nexstar wants Cox to pay for including its programming as part of a basic cable package.
This is the second time in a month Baton Rouge Cox customers have been caught in a so-called retransmission dispute. WVLA, the local NBC station and KZUP, an independent broadcaster, were off Cox for nearly two weeks starting on New Year’s Day. This caused local Cox customers to miss an NFL playoff game, the Golden Globe Awards and other programming. Nexstar provides management services to WVLA and KZUP but does not negotiate retransmission rates.
Nexstar officials would not say exactly how much more they want Cox to pay to carry their programming, citing a company policy to not discuss retransmission rates.
“We’re asking Cox to pay us at market rate,” said Jennifer Neuman, a spokeswoman for Nexstar, a Texas-based company that owns 103 TV stations and 54 digital multicast signals. The dispute has caused Nexstar stations to go dark in several major markets, including Las Vegas and Phoenix.
Neuman said Nexstar is asking Cox to pay the same retransmission rates that it got other cable and satellite companies to agree to in December. According to a company news release, that’s slightly more than double the previous rates, which were agreed to more than five years ago.
According to figures cited by Nexstar, U.S. broadcast stations are responsible for 35 percent of all household TV viewing but get about 12 percent of the revenue from cable, satellite and telecom providers. While Cox pays nearly $8 per household so it can carry ESPN and $1.65 a month to air TNT, it pays companies like Nexstar far less. SNL Kagan, which tracks the cable industry, said retransmission fees for broadcast stations were an average of 89 cents per customer in the second quarter of 2015, a 40 percent year-to-year increase.
Sharon Bethea, a local spokeswoman for Cox, said Nexstar is negotiating in bad faith. She said the station owner is asking for a retransmission fee that is three times more than what Cox has been paying and it rejected an offer to take a rate that was the same as what WVLA and KZUP accepted two weeks ago.
“We certainly never like to put our customers in this type of situation,” Bethea said. “We strive to protect them from significant programming fee increases.”
Last week, Nexstar announced a plan to acquire Media General, a Virginia company that owns 71 TV stations, including KLFY, the Lafayette CBS station. The deal is valued at $4.6 billion and would create the second-largest broadcast company in America in terms of reach. The Nexstar Media Group would reach about 39 percent of U.S. television households.
Cox has come out against the Nexstar-Media General merger and accused the company of using higher retransmission fees to pay for the deal. “It feels and looks like they’re trying to finance the deal on the backs of customers,” Bethea said.
Nexstar said customers aren’t being asked to pay more because of the potential merger and blamed Cox for paying money on programming with marginal viewership, forcing the cable company to have to raise its rates.
Nexstar said it’s seeking fair compensation for the value of its local programming because of its commitment to local viewers and their information and entertainment needs.
The company also said Federal Communications Commission rules forbid it from finding out how much Cox is paying Nexstar-managed stations for retransmission rights.
Follow Timothy Boone on Twitter, @TCB_TheAdvocate
Editors Note: This story has been changed to note all of the Acadiana stations affected.