Blackout looms as Time Warner, Viacom talks stall

Wed Dec 31, 2008 2:22pm EST
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By Yinka Adegoke and Paul Thomasch

NEW YORK (Reuters) - Viacom Inc and Time Warner Cable remained at a standoff on Wednesday, but were hopeful that top executives would step in to resolve a dispute that threatens to prevent more than 13 million U.S. subscribers from seeing "Dora the Explorer" and Jon Stewart.

No face-to-face meetings between executives have occurred for several weeks, sources on both sides said. The sources asked to remain anonymous because they were not authorized to discuss the situation publicly.

At issue is an extra $35 million to $40 million that Viacom wants Time Warner to pay for carrying its cable channels, including MTV, Comedy Central and Nickelodeon.

Time Warner has refused saying the economic climate makes it impossible to pass along such costs to its customers. Viacom has denied Time Warner's request for an extension of the current terms.

Instead, Viacom threatened to pull its TV networks from Time Warner at midnight on January 1 unless a deal was reached. Viacom also wants Time Warner Cable's Chief Executive Glenn Britt to become more active in the talks, sources said.

Although disagreements between cable carriers and programmers are common, this one is particularly notable given it involves two major companies, threatens top shows, and has prompted a high-profile advertising campaign.

Time Warner is a major outlet for programmers with its 13.3 million video subscribers and presence in New York, Los Angeles, Dallas and Cleveland.

But Viacom has an equally strong hand. It controls 19 cable TV networks that offer "Dora the Explorer" and "The Daily Show with Jon Stewart" among others.   Continued...

<p>Rob Marcus, CFO of Time Warner Cable, poses after speaking at the Reuters Media Summit in New York, December 1, 2008. REUTERS/Brendan McDermid</p>