The New Year isn’t exciting for cable operators and is particularly dull for Cable ONE Inc. CABO which failed to ink a retransmission consent agreement with Northwest Broadcasting by the Jan 1 midnight deadline. So, the Northwest Broadcasting channels are no longer available via Cable One.
This will affect Northwest affiliates in Idaho Falls, Pocatello and Lewiston, ID and Clarksdale, Winona, Yazoo, Grenada and Cleveland, MS. Northwest Broadcasting operates the Big Four broadcast networks in Grenada and Cleveland, namely WABG (ABC), WABG2 (FOX), WNBD (NBC), and WXVT (CBS). All these channels went dark at midnight Jan 1.
Cable One had already warned its customers on Dec 29, that they might not succeed in cutting the deal. Cable ONE had said that it was in talks with Northwest Broadcasting over programming fees for several weeks and was putting in maximum efforts to reach a fair deal. But Northwest Broadcasting demanded a hike of nearly 70% over its previous contract with Cable One, which is a higher rate than what Cable ONE pays to any other television broadcaster in any of its 40 operating markets.
Moreover, Northwest Broadcasting even denied Cable ONE an extension after Jan 1, wherein channels would be in operation for viewers’ comfort until the two entities negotiated their terms.
However, Cable One received an extension in its retransmission negotiations with Hearst broadcasting concerning six channels — Oklahoma City's KOCO-TV (ABC), WVTM-TV (NBC) in Birmingham, AL; KOAT-TV (ABC) in Albuquerque; WDSU-TV (NBC) in New Orleans; KETV (ABC) in Omaha; and WAPT-TV (ABC) in Jackson, MS.
Winding Up
Cable ONE is among the top 10 cable companies in the U.S., offering high-speed Internet, cable television and telephone services to almost 700,000 customers across 19 states. Cable ONE provides consumers with a wide range of products and services, including wireless Internet, high-definition programming, and free, unlimited long-distance calling in continental U.S.
Moreover, shares of Cable ONE have outshined the Zacks categorized Cable TV industry in the past one year. The stock added 44.03%, which is higher than the industry’s gain of 18.35%.
However, the company faces intense competition from leading cable multi-service-operators (MSOs) in the U.S. like Comcast Corp. CMCSA and Charter Communications Inc. CHTR. We believe tough competition and failure to reach new consent agreements are behind Cable ONE’s current Zacks Rank #4 (Sell).
A Key Pick
A well-placed stock in the telecommunication sector is Liberty Media Corp.LMCA sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty Media posted a positive earnings surprise in three of the four trailing quarters, the average beat being 72.13%.
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