Sinclair CEO Expects Fubo-CBS Carriage Dispute to be Resolved in Coming Months

Customers of the live TV streaming service fuboTV were disappointed to learn in late January that the service would no longer be carrying local CBS stations in 160 major markets. Instead of getting CBS coverage specific to their community, customers in those markets are left with a national feed of CBS, which does not include any local content.

Many of those affiliates are owned by Sinclair Broadcasting Group (SBG), whose CEO Chris Ripley offered an update on the situation during the company’s fourth-quarter earnings call with industry analysts on Wednesday. When asked if he foresaw a similar dispute when YouTube TV’s carriage agreement with CBS is up in the next few months, Ripley did not speculate but said that he thought the Fubo dispute could be resolved in that time.

“I think this will eventually get resolved here in terms of Fubo,” Ripley said. “YouTube, we’ll have to see, but my take on it is that it will be resolved at some point between us and the networks in the next couple of months.”

That’s encouraging news for Fubo users who want their local CBS streams back, but the decision is somewhat out of Ripley’s hands. The CEO explained that affiliates are not permitted by the network to negotiate with carriers like fuboTV directly. Networks do that type of negotiating, then present the deal they’ve struck to affiliates who can choose to opt-in or out. In this particular case, a large percentage of CBS affiliates thought the deal was below what they could accept.

“The CBS Affiliate Board unanimously believes that the offer CBS presented at the broadcast stations meaningfully undervalued the important local content that our stations provide,” Ripley explained. “Fubo is also seemingly getting caught in the crossfire here, so to speak, as it’s our understanding that they were not given the opportunity to negotiate with us directly.”

That inability to negotiate with virtual multichannel video programming distributors (vMVPDs) directly is something more broadcast companies are finding themselves stumbling upon. Affiliate owners like SBG would need intervention from Congress to make it possible for direct negotiations with providers like fuboTV to take place, which judging from his comments, Ripley would likely welcome with open arms.

“There’s a growing consensus within the broadcast community, and also within D.C., that this situation with the virtuals, it needs to change,” Ripley said. “It really is not consistent with the way the industry is set up and the way market power should be used. So that’s what I’ll say on Fubo.”

vMVPDs — also known as live TV streaming services — are governed by different regulatory standards than traditional over-the-air cable and satellite providers. Broadcasters would like them to be regulated the same way, which would give affiliates the chance to negotiate with virtual providers like fuboTV and YouTube TV directly.

Since the changing of those rules would require government intervention, viewers shouldn’t expect such changes anytime soon. But the CBS-Fubo dispute could resolve much faster than that, according to SBG chairman Chris Ripley.