Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Time Warner Cable Inc. (TWC - Analyst Report) has finally reinstated CBS Corporation’s (CBS - Analyst Report) programs on its list by striking a new deal with the latter. However, the financial terms of the agreement were not revealed.

The deal brought respite to nearly 3.2 million customers across New York, Los Angeles and Dallas who were deprived from the popular shows on CBS network for a month. Moreover, the start of the NFL season from Sep 8 has induced Time Warner Cable to restore the channels, apprehending subscriber loss.

In Jul 2013, CBS had demanded higher fees from Time Warner Cable, which had compelled the cable giant to drop the former’s network from its program list. According to Time Warner Cable, CBS wanted to raise its retransmission fees from 56 cents to nearly $2, which is around a 250% hike. Such high program rates would have not only shoot up programming expenses but would also deteriorate margins for company. It would also force the company to raise service rates, which it has done in the beginning of 2013.

Similarly, last year, the largest satellite TV operator in the U.S. – DIRECTV (DTV - Analyst Report) – and TV network major, Viacom, Inc. (VIAB - Analyst Report), differed on the issue of programming fees. This had led to channel blackout for DIRECTV customers. Finally, the satellite giant had to renew its contract for a period of seven years with a significant 20% rate hike.

Higher transmission fees escalate programming costs, forcing the cable and satellite service providers to charge higher service fees from customers. Thus, such contract renewals with channel operators do not favour the cable operators.

Hence, we believe it is high time that the FCC intervenes and prevents the cable operators from getting exploited.

Currently, Time Warner Cable has a Zacks Rank #3 (Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GENERAL FINA GFN 8.20 +5.67%
QIHOO 360 TE QIHU 91.57 +4.38%
VIPSHOP HOLD VIPS 140.01 +3.49%
INVESTMENT T ITG 19.16 +3.34%
VERTEX ENERG VTNR 7.38 +3.07%