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Response From Leslie Moonves to Letter From Glenn Britt

Response From Leslie Moonves to Letter From Glenn Britt

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Published by Robert Wilonsky
Long story short: Blackout continues.
Long story short: Blackout continues.

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Categories:Types, Business/Law
Published by: Robert Wilonsky on Aug 06, 2013
Copyright:Attribution Non-commercial

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08/09/2013

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 August 6, 2013Glenn BrittChairman and Chief Executive Officer Time Warner Cable60 Columbus Circle, 17
th
Floor  New York, NY 10023Dear Glenn:
I was surprised to get your letter yesterday, particularly since I hadn‟t spoken to
you in more than
a week. Come to think of it, you haven‟t reached out to me
 personally, as I have to you on more than one occasion, even once during thisentire matter, so your communication was both unexpected and welcome. Thefact that you released it simultaneously to the media, however, dampened myenthusiasm somewhat. It made me suspect that the document was not, as I hoped,a sincere offer but rather a public relations gesture of some kind. Sadly, mysuspicions were more than justified. I was also surprised and disappointed whenyour incoming CEO, when asked by CNBC whether we had responded to your 
lengthy letter, said, “I am not awa
re of CBS having made a counterproposal or 
responded to our proposal in any way.” I found this rather dishonest. After all, we
had received your communication along with the press not five minutes beforeairtime, as he surely must have known.
 Nevertheless, I welcome this opportunity to respond to your “offer,” and to run
down some other specious arguments you have made that require clarification andcorrection.First, after reviewing your letter, we have concluded that there is not a sincere or helpful proposal in it. It is, rather, a well-wrought distraction. Let me remind you,Glenn, that you have in your possession more than 100 pages of our actual proposal, with economics, terms and rights agreements contained for CBS,Showtime and all the content vehicles under discussion. You had them well before you dropped our programming from your service. We have never receiveda mark-up or reply to anything contained in them. Last Friday, in spite of the factthat we had offered a one-week extension to remain on the air while we continuedour discussions, you chose to take us off the air. Why? Because, as your new CEO
stated, Time Warner Cable would “have more leverage” with CBS off the air 
and
 
our viewers deprived of our programming. Since that night, Friday at 5:00 PM,we have not heard from anybody at Time Warner Cable to discuss anything at all,in spite of your public statements to the contrary. Until, of course, your publicletter masquerading as a private one.
That‟s not negotiating. That‟s grandstanding.
 As to your ground
 breaking “offer” to go
a la carte
: Anyone familiar with theentertainment business knows that this is an empty gesture. The economics andstructure of the cable industry have created a certain way that content isdistributed and compensated. We both know that a true
a la carte
universe is notone that Time Warner Cable welcomes.
In fact, if you thought it was a good idea, why aren‟t you offering your new,
multi-billion-dollar Lakers and Dodgers channels to your subscribers in LosAngeles on an
a la carte
basis? Instead, your subscribers in Los Angeles arealready being charged in the neighborhood of $4.00 for the Lakers and likelymore than that for the Dodgers
 – 
both of which you have pulled off broadcast
television entirely. These charges are added to the cost of your customers‟ basic
monthly bill whether they want them or not. At the same time, you find itimpossible to pay far, far less than that for the network that brings your viewersthe NFL, the PGA Championship, the Masters, the NCAA Basketball tournament,SEC Football, plus 60 Minutes, NCIS, The Big Bang Theory, Under the Dome,David Letterman, the Grammys, and so much more.We view your so-called proposal, then, as nothing more than an attempt to muddythe water and confuse the public discussion.Are you really so reluctant to come to the same kind of agreement that we havestruck 
 – 
without incident
 – 
with every other cable operator, telco and satellite provider? You already pay ten networks on your channel lineup more than youcompensate CBS, all of which have far fewer viewers. What we are looking for,have always been looking for, is fair compensation for our content. CBS is themost popular programmer in the world. Showtime has content that is the mostsought-
after in the business. Why can‟t you see your way clear to honestly paying
for what your customers value most?Perhaps the most egregious portion of your letter was at the very top, where you
“agree to resume carriage with the „new economics‟” while “employing all theother terms and conditions of our recently expired contracts.” On the surface of it,that looks reasonable. But it‟s not. Clever PR, perhaps, but not genuine
negotiat
ion. As I am sure you know, we have no “new economics” that are notintimately tied to new “terms and conditions.” Those terms and conditions, better 
known as rights, were established in 2008. That was before the introduction of theiPad. Netflix was still doing little but mailing out DVDs. Amazon was known
simply for selling books. This doesn‟t even begin to account for the new entrants

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