{alltv} Comcast and CBS reach 10-year programming agreement

NEW YORK (Reuters) – CBS Corp and Comcast Corp, the No. 1 U.S. cable company, said on Monday they reached a 10-year programing agreement that includes the CBS broadcast network and pay-TV channel Showtime.

The arrangement also includes expanded distribution of CBS College Sports as well as CBS and Showtime content online and the launch of the Smithsonian Channel on Comcast.

Under the new deal, whose financial terms were not disclosed, CBS will be paid so-called retransmission fees for the continued carriage of its free-to-air broadcast signals by Comcast.

"Here is the sustainable revenue stream that's going to be going on for many years to come," said CBS Chief Executive Leslie Moonves.

The two sides hammered out the agreement 18 months ahead of their existing deal's expiration.

He said the early negotiations did not have anything to do with Comcast's acquisition of NBC Universal, a deal still awaiting approved by regulators.

Moonves has been a long-time proponent of broadcasters receiving programing payments from cable and satellite distributors.

He has previously suggested that CBS be paid a monthly fee of about 50 cents a subscriber. Those terms would imply that in this deal, Comcast and its 23.2 million subscribers would pay CBS about $139 million a year. Neither party would comment, but analysts at Macquarie Securities estimated that CBS was able to negotiate between 75 cents and $1 a subscriber.

Moonves said last year he expects $200 million to $250 million in retransmission revenue by 2012. "We are on track to do that with this deal," he said.

Until recently, broadcasters such as CBS, Walt Disney's ABC, News Corp's Fox and General Electric's NBC were not paid carriage fees while cable networks have always been paid for distribution.

A push by broadcasters has led to programing fee disputes, with distributors balking at being charged for programing they had traditionally obtained for free.

On New Year's Eve, Time Warner Cable Inc narrowly avoided a blackout of Fox programs after the two sides initially failed to reach an agreement. Time Warner Cable is getting ready for a potentially similar dispute with Disney at the end of this month.

Comcast would be especially keen to get its broadcast agreements in place early and avoid public disputes in light of the ongoing regulatory review of its purchase of NBC Universal.

For their part cable companies like Comcast are eager to increase their offerings of on-demand programing as they face rising competition from the increasing number of TV shows available on the Internet from services like Hulu and Netflix.

"In this time of rapidly changing technology and viewership interest, we were able to structure a deal that gives customers the content they want without any threat of disrupting their service," Comcast Chief Executive Brian Roberts said in a statement.

CBS shares were up 3.6 percent at $15.31 on the New York Stock Exchange and Comcast shares were down 0.3 percent at $19.41 on the Nasdaq.