Viacom to remove Time Warner's Spongebob Squarepants

Addled by sinking ad revenues


Media giant Viacom is threatening to remove its 19 cable TV networks from Time Warner Cable if the operator doesn't agree to a carriage fee increase by midnight Eastern time tomorrow. Viacom's networks include MTV, Comedy Central, and Nickelodeon.

In a statement released yesterday, the Sumner Redstone-run outfit said it's seeking a fee increase of "less than 25 cents per month per subscriber" or "less than a penny per day for all 19 of MTV Networks' channels."

The statement accuses Time Warner of forcing Viacom's channels off the air, claiming the cable operator is "overreaching for profit at the expense of its viewers."

Time Warner sees things a little differently. "Christmas is over, but Viacom is still playing Scrooge, threatening to pull its MTV Networks off of Time Warner Cable at midnight tonight unless we ask our customers to pay exorbitant price increases," reads the reply the company tossed us over email.

"Viacom claims their demands equate to 'pennies,' but that is misleading and insulting to our customers, from whom Viacom is trying to extort another $39 million annually - on top of the hundreds of millions of dollars our customers already pay to Viacom each year. That doesn’t sound like pennies to us. Demanding that our customers pay so much more for these few networks would be unreasonable in any economy, but it is particularly outrageous given the current economic conditions."

Time Warner spokesman Alex Dudley told Bloomberg the company is willing to agree to a "modest" fee increase. "They are clearly desperate to make up for sagging ratings and sagging ad revenue on the backs of Time Warner Cable customers," he said.

Dudley also said that the company was willing to provide customers will refunds if they lose programs such as "The Daily Show," "The Colbert Report," "Dora the Explorer," and "SpongeBob SquarePants."

Amidst the Meltdown, Viacom's US cable-network ad revenue dropped three per cent during the third quarter. But affiliate revenue leapt 12 per cent.

"TWC has so greatly undervalued our channels for so long," Viacom's statement reads. "Throughout the country, we have negotiated equitable license agreement renewals, or are in the final stages of renewals, with virtually every cable and satellite carrier.Time Warner Cable has dismissed our efforts at a fair compromise and has effectively chosen to deny its customers some of the most popular TV shows on the air."

If Time Warner Cable - America's second largest cable operator - does not meet its new terms, Viacom plans to pull the plug on its 19 channels at 12:01 on January 1. ®


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