CBS VS Time Warner Cable Blackout Looms

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July 29 (Bloomberg) -- Bloomberg's Alex Sherman and Paul Sweeney discuss the possible outcomes if CBS and Time Warner Cable don't reach an agreement before the deadline. They speak to Trish Regan and Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)

The clock is ticking for time warner cable and cbs and for all of us as well.

If they can't reach an agreement by 5:00 p.m. eastern, in 20 minutes, fans may miss out on favorites like homeland and big bang theory.

We have been following this very real life, home.

The former institutional all- star analyst ranking, let's try to figure this out.

Both trading at about the same multiple.

It the movies to companies they work this out.

We have just a few minutes to figure it out so hopefully we can work it out between us.

Time warner cable takes the stand for its customers to say we are sick of paying these big transmission fee increases.

It did not exist 10 years ago because cable providers would get broadcast for free.

As these multichannel bundles have gotten bigger, the broadcast networks have started to say you have to pay $5 or $6 a month, they are getting billions of dollars for the content.

Time warner cable has said, that might be true, but you are asking for a 600% premium over the same programming we're giving to these local affiliates not owned in smaller markets.

We're willing to give you some money, but not that much money.

It is overpriced, that is the loggerhead.

Is that price?

If it overpriced?

Espn is the street high.

And cbs wants how much?

Hard to say, right now they get 66 cents.

How they might want as much as a dollar or two, but those numbers are not public.

This is a whole new revenue stream.

This is one of the main drivers of the stock price.

This is a second revenue stream, they have always had advertising, but they're starting to get paid by the distributors.

This is almost 100% margin.

On the flip side, if you are comcast, your biggest expense is programming.

And that is going up about 10% a year, much faster than you can switch prices.

Why not be willing to take a little bit less?

Let's say that they might be.

The deal comes from these things.

There are ads that have been running, don't let time warner cable take away your favorite shows.

Even though when there is a blackout, it is usually just a matter of days.

There is no way they will get -- and they are not going to budge.

It will come at the very last minute and to reach a deal.

Espn, fox, cbs, take your pick.

The fact that each will see our revenue stream, will we get cable a cart?

The bundling of different channels is a way of keeping the general price per channel down.

It would cost more money to sell that channel.

Espn might cost you.

There are some that consume a lot.

People believe the consumer will always win say is just a matter of time.

The consumer doesn't always win.

There needs to be some sort of business involved.

We get some sort of decision.

This text has been automatically generated. It may not be 100% accurate.

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