Entertainment Industry

Category: Dish Network

Fights between programmers and distributors heat up as 2011 nears

We've seen this movie before. The programmer says it isn't getting paid enough for its programming. The cable operator says it already pays too much and, given the tough economy, now is not the time to be asking for more money. The two sides bicker back and forth and take out ads accusing the other of negotiating in bad faith. Eventually, local and national politicians jump into the fray, and then at the last minute a deal is reached.

As the end of the year approaches, there are several skirmishes going on between programmers and distributors that will hit full boil when the clock strikes 2011. It isn't just broadcast networks and local TV stations in these feuds. Viacom, parent of cable channels MTV and Nickelodeon, is in an ugly fight with Suddenlink, a large cable operator with systems in Texas, Louisiana and West Virginia. Comcast's E! and Style Network are in danger of being dropped by satellite broadcaster Dish Network, and its Golf Channel could be dropped by DirecTV. 

The battle everyone is watching is between Sinclair Broadcast Group and Time Warner Cable. Sinclair owns almost 60 television stations across the country, including 20 Fox affiliates. Its stations are carried by Time Warner Cable systems that serve 8.5 million consumers.

Both sides have stopped talking. Earlier in the week, Sinclair said Time Warner Cable rejected an offer to continue carrying its stations for an additional 10 cents per subscriber per month. Unfortunately, neither Sinclair nor Time Warner will say what the total cost of carriage on a per-subscriber basis would be with that additional 10 cents. Given all the heated rhetoric, it seems safe to say it is an increase that would put the cost over 25 cents per subscriber and perhaps even north of 50 cents, with annual increases included as well. 

What makes this dispute worth paying attention to over the others is the behind-the-scenes role that News Corp.'s Fox Broadcasting Co. is playing. Earlier this year, Fox struck a deal for its own TV stations with Time Warner Cable. As part of that pact, there is a clause that allows Time Warner Cable to purchase Fox programming should the cable operator lose the rights to carry the signals of a Fox affiliate.

Fox says it agreed to the clause so consumers wouldn't lose its programming as a result of negotiations gone awry. "Our goal is to protect Fox viewers from any service interruptions, allow our affiliate partners to reap their local ad dollars and continue to negotiate a retransmission agreement without deadline pressure," Scott Grogin, a Fox spokesman has said.  "We also believe that‪ the deal provides significant incentive to both sides to come to an agreement that protects consumers."

Some affiliates think that Fox is meddling and undercutting its own partners. Barry Faber, the general counsel for Sinclair, said earlier this month that Fox's deal with Time Warner Cable "makes it more difficult to negotiate for retransmission consent if your network has provided the cable company an alternative way to receive the feed."

Fox has an interest in seeing Sinclair get as much money as it can from Time Warner Cable because it, like other broadcast networks, wants a cut of any fees their affiliate partners get from cable and satellite operators.

With that in mind, Sinclair and other Fox affiliates are wondering why the network would agree to something that could potentially take away the leverage their affiliates need to cut the best possible deal.

Given that Fox does provide prime-time programming and big sporting events too, it is not surprising that it would want some of that money.

But Fox is asking its affiliates for a big chunk of their so-called retransmission consent revenues, according to industry executives familiar with the situation. That, in turn, is putting pressure on the affiliates to squeeze the cable operators.

Of course, in the end, we all know who will get squeezed the most.

-- Joe Flint

Related posts:

Fox clause is focal point of Sinclair-Time Warner Cable fight

Fox explains its role in Time Warner Cable fight with Sinclair

News Corp. deal with Dish Network may increase heat to get Cablevision fight settled

News Corp.'s reaching a deal with satellite broadcaster Dish Network that includes not only 19 regional sports networks, but also Fox television stations across the country, could put more pressure on Cablevision and Fox to reach a deal.

The deal between Dish, which has 14.3 million subscribers, and News Corp. was finalized Friday afternoon and came a month after Fox pulled the signals of its sports channels as well as other cable channels, including FX. It came just when Dish's deal to carry Fox TV stations, including KTTV-TV Los Angeles, was expiring.

It is likely that Fox will look to use its deal with Dish as evidence that it is Cablevision Systems Corp. that is being unreasonable in their dispute. Fox pulled the signals of its New York and Philadelphia TV stations from roughly 3 million Cablevision homes in New York, New Jersey and Connecticut two weeks ago.

The talks are still at a standstill. Cablevision wants an arbitrator brought in to help strike a deal, a move that Fox is against. Although there has been pressure from both politicians and Cablevision on the Federal Communications Commission to try to force Fox to accept arbitration and/or restore the signals on a temporary basis, the agency is keeping its distance. FCC Chairman Julius Genachowski has chided both companies for spending more time attacking each other and lobbying lawmakers than trying to cut a deal.

That Fox was able to reach an agreement with Dish Network, which like Cablevision is known in the media industry for being a tough negotiator, may bolster Fox's argument that there is no need for a third-party mediator or some sort of government intervention.

In a statement about the Dish deal, Genachowski said he urges "Fox and Cablevision to complete their negotiations and end the impasse that has disrupted service to viewers.” The chairman also sent a letter to Sen. John Kerry (D-Mass.), who is proposing new regulations that would give the FCC more clout in these disputes, saying that he agrees that it is time to revise the rules.

"Under the present system, the FCC has very few tools with which to protect consumers' interests ... it is time for Congress to revisit the current retransmission law and assess whether changes in the marketplace call for new tools to strike the appropriate balance of private negotiations and consumer protection," he wrote to Kerry.

-- Joe Flint

Related posts:

Fox and Dish Network resolve feud

Fox says no to Cablevision's latest offer

Cablevision makes Fox offer it hopes it can't refuse

Bundling is key part of Fox - Cablevision fight

Cablevision CEO wants sitdown with FCC

Fox and Cablevision take fight to FCC

FCC wants proof Fox and Cablevision are trying to make a deal



Cablevision makes Fox an offer it hopes can't be refused

With the World Series starting in several hours, Cablevision Systems Corp. has made an offer to News Corp. that it hopes will get Fox TV stations in New York and Philadelphia back on its cable systems in time for the opening pitch.

But it may not be an offer that News Corp.'s Fox can't refuse.

In a statement, Cablevison said it would agree to a one-year deal in which it would pay the same price Fox charges Time Warner Cable to carry WNYW-TV New York and WTXF-TV Philadelphia. Fox pulled the signals of its stations from about 3 million Cablevision homes in New York, New Jersey and Connecticut about two weeks ago. Besides the hit shows "Glee" and "House" and NFL football, Fox also the rights to the World Series, which starts Wednesday night.

What Cablevision didn't say is whether it would carry Fox's other New York TV station, WWOR-TV, and its cable channels Fox Business Network and National Geographic Wild.

Cablevision had been carrying those two cable networks and WWOR-TV along with WNYW-TV and WXTF-TV as part of a one-year deal it struck with News Corp. last October.

Time Warner Cable struck a long-term deal with News Corp. earlier this year that includes other cable networks. The price it pays for Fox stations increases throughout the length of the deal. In the first year, the price tag is around 50 cents per subscriber.

The price Fox charges for the TV stations without the cable channels is much higher than that, according to a filing Cablevision made at the FCC detailing negotations between the two companies.

Fox has not yet responded to Cablevision's latest offer. It is also negotiating with Dish Network, the satellite broadcaster that has 14.3 million subscribers nationwide, including over 600,000 in Southern California. The deal for Dish to carry Fox's stations expires in days. Dish and Fox already have a tense relationship. Dish stopped carrying more than a dozen of Fox's cable channels, including all of its regional sports networks.

Although the two sides have indicated they are still far apart, there may have been some progress in the last few days. Both sides said they are still negotiating, but one industry source says a deal could be wrapped up very soon that would not only keep Fox on but also restore the regional sports networks and other cable channels.

-- Joe Flint

Related Posts:

Bundling is key part of Fox - Cablevision fight

Cablevision CEO wants sitdown with FCC

Fox and Cablevision take fight to FCC

FCC wants proof Fox and Cablevision are trying to make a deal

One reason Fox is unwilling to arbitrate its differences with Cablevision



Fox sports channels and FX dropped from Dish Network

In an increasingly contentious battle over price hikes, News Corp.'s Fox pulled several of its cable channels -- including 19 regional sports channels -- from satellite broadcaster Dish Networks early Friday morning.

The channels included in the blackout were FX, National Geographic Channel and such popular regional sports outlets as Fox Sports West and Prime Ticket, two channels that are scheduled to broadcast this weekend's season-ending games of the Los Angeles Angels and Los Angeles Dodgers.

The Fox broadcast network, local Fox television stations and the Fox News Channel were not part of the contract being negotiated, and remain available to Dish's 14.3 million customers.

"The proposal we’ve offered Dish is fair and in line with the tremendous value we provide," Fox said in a statement. "We regret the inconvenience to our viewers, but Dish has asserted its subscribers do not value our channels and has made a decision to go forward without them."

Dish, meanwhile, charged that Fox's demands were akin to price-gouging.  Dish, in a statement, said that Fox was seeking an "unprecedented rate increase of more than 50%," a charge that a Fox spokesman called a "gross overstatement." Fox declined to say how much it was demanding from Dish.

Dave Shull, senior vice president of programming for Dish Network, said in a statement:  "Our customers should not be held hostage in order to finance Fox's irresponsible acquisition of sports rights. Consumers are already burdened enough in this challenging economy."

Such disputes are becoming common in the television industry. Dish and other television distributors are struggling to hold the line on pricing rather than face additional wrath of consumers angry about seemingly ever-increasing monthly bills. Meanwhile, programming costs -- including sports rights fees -- continue to escalate and programmers, including Fox, are attempting to raise their fees to compensate.

Later this month, the two companies -- Fox, which is part of Rupert Murdoch's News Corp., and Dish Networks, based outside Denver and run by Charlie Ergen -- will wrestle over fees for the Fox broadcast network, which airs such popular shows as "Glee," "The Simpsons" and "Family Guy." That contract is set to expire on Oct. 31 -- during the network's coverage of the World Series.

-- Meg James


Fox and Dish Network take negotiations into late innings

Fox and satellite service Dish Network were closing in on a midnight Thursday deadline to strike a new agreement that would keep FX, National Geographic Channel and a host of regional sports networks on the air.  As of Thursday evening, the two sides were still chipping away on a new contract and it was unclear whether News Corp.'s Fox would pull its channels from the programming packages of Dish's more than 14 million customers.

The Fox broadcast network is not included in the current tussle, although it will become the centerpiece of a separate dispute between the two companies over a contract set to expire Oct. 31. Not coincidentally, that date falls during Major League Baseball's World Series, which Fox televises.

For now, the stakes are lower. The Los Angeles Dodgers and Los Angeles Angels are scheduled to finish their seasons this weekend with games broadcast by the Fox regional sports channels, Prime Ticket and Fox Sports West.  Dish subscribers would miss out if Fox pulls the channels.  Dish subscribers would also have to skip "The Dog Whisperer" on Friday on the National Geographic Channel, and "Sons of Anarchy" on Tuesday on FX, if the dispute dragged into next week.  


Contentious contract negotiations have become a trend in the television industry as programmers struggle to hike fees to try to cover the rising costs of programming. 

Cable and satellite television providers are trying to hang tough to mollify their customers, who are tired of ever-rising cable bills and now have other pay TV options. 

Already this year, Walt Disney Co. pulled its programming from New York cable giant Cablevision for several hours on the day the Academy Awards were broadcast, and the Hallmark Channel has been off AT&T U-Verse for nearly a month.

Fox and  Cablevision also are headed for an Oct. 15 showdown -- which could cause plenty of angst for fans of the playoff-bound New York Yankees.  If no agreement is reached, Cablevision would lose the right to carry the Fox broadcast network as well as two tiny channels, National Geographic Wild and the Fox Business Network.

The Fox News Channel is not part of either of these disputes.

-- Meg James

Photo by Jay L. Clendenin, Los Angeles Times

Dish Network takes aim at Comcast over Philadelphia sports channel

A long-running fight between satellite broadcaster Dish Network and Comcast over the cable company's Philadelphia sports channel is heating up again.

At issue is Comcast SportsNet Philadelphia, a cable network that carries local sports teams including the 76ers and Flyers, which are both owned by Comcast. Dish Network and DirecTV, the nation's other major satellite broadcaster, want to carry the channel in Philadelphia. Comcast, which allows Verizon and other distributors to carry the network, has not struck a deal with either Dish or DirecTV.

Dish and DirecTV have again recently approached Comcast about getting access to the sports channel, no doubt hoping that the cable company's need to get regulatory approval for its proposed deal to acquire NBC Universal might make it more willing to let the satellite operators carry the channel.

So far though, no deals have been struck. A loophole in Federal Communications Commission regulations that allowed Comcast to keep carriage of SportsNet Philadelphia off of the satellite broadcasters was recently rewritten, but the cable company has said that the change in the rules does not mean it automatically has to sell the service to Dish and/or DirecTV.

In a statement released Friday, Dish said, "[I]t is this type of anti-competitive conduct that reinforces our argument that the merger between Comcast and NBCU poses a grave threat to competition in the multichannel video market."

Comcast SportsNet fired back that it "remains willing" to discuss carriage of Comcast SportsNet Philadelphia. It argued that it is not violating FCC rules, countering that the change in the regulation only allows a distributor to demand access to a channel when it can show a "competitive injury" and that there is "no evidence" Dish has suffered such an injury.

DirecTV said it is still waiting for a response from Comcast on its request to carry SportsNet Philadelphia and declined further comment.

Battles between satellite broadcasters and cable operators such as Comcast over exclusive content are not unusual. Dish has exclusive programming, as does DirecTV. However, given the concerns of media concentration and the potential power a Comcast-NBC Universal entity could have, such feuds are now taking on greater significance. 

One sticking point for Comcast that its satellite rivals might play up is that it owns sports franchises and the cable network that carries the teams. DirecTV may have exclusive content from the National Football League, but it does not own the NFL.

-- Joe Flint

Dish Network blinks in fight with Weather Channel

Dish Network, the satellite broadcaster with over 14 million subscribers, backed off its threat to drop the Weather Channel from its service over a contract dispute.

On Thursday, Dish Network said it was removing the Weather Channel in favor of its own weather network, called Weather Cast, that it was launching Friday.

Although Weather Cast did indeed launch, the Weather Channel is also still in Dish Network homes.

Dish Network cited the Weather Channel's addition of movies to its lineup as the reason it was dropping the service.

However, people close to the situation said it was the Weather Channel's push for a higher fee from Dish Network that led to the dispute.

According to SNL Kagan, an industry consulting firm, the Weather Channel charges about 11 cents per month, per subscriber for the channel. The Weather Channel is looking to increase that fee by about 10%.

For now, the two sides are still talking. Dish Network has always been one of the tougher distributors and in the past has shown a willingness to drop networks over fee disputes.

-- Joe Flint

Relations between Weather Channel and Dish Network get stormy

Dish Network, the nation's second largest satellite broadcaster, with just over 14 million subscribers, is planning on dropping the Weather Channel and is starting the "Weather Cast," its own version of the network.

The move comes after Dish and Weather Channel have been unable to reach a new distribution agreement. 

Dish said Weather Cast will "feature live round-the-clock weather reporting" and will replace Weather Channel, which the company said "has recently moved away from weather reporting to a mix of movies and other entertainment-focused programming."

The new channel will premiere at midnight Thursday, when its current deal with Weather Channel expires.

In a statement, Weather Channel said it was disappointed by Dish's move, adding that "despite negotiations over the past several months, Dish has chosen to be the first distributor to drop the Weather Channel rather than pay the industry standard rates others in the industry have already agreed to pay."

According to industry consulting firm SNL Kagan, Weather Channel charges about 11 cents per subscriber, per month. That is one of the lower subscriber fees for a cable channel. Of course, Weather Channel does not have the big ratings of general entertainment networks that charge distributors more for carriage. Weather Channel was seeking to up its fee by nearly 10%, to 12 cents per subscriber, a person close to the situation said. 

The two sides have been arguing over money for several months now, and Dish having a new network ready seems to indicate that it has been prepared to drop Weather Channel for some time.

Weather Channel is owned by a consortium composed of private equity firms Blackstone Group and Bain Capital with NBC Universal holding a minority stake. 

-- Joe Flint


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