Play ball! Fox channels are back on Cablevision as agreement in principle is reached
The signals of News Corp.'s Fox TV stations in New York and Pennsylvania were restored to 3 million Cablevision Systems Corp. subscribers Saturday night after the two sides struck an agreement in principle.
The tentative deal comes more than two weeks after Fox pulled the signals of its New York and Philadelphia TV stations from Cablevision subscribers in New York, Connecticut and New Jersey. At issue were fees Fox wanted Cablevision to pay to carry those signals as well as the feeds for three cable channels -- Fox Business Network, Spanish sports channel Fox Desportes and National Geographic Wild.
Although the two sides finally seem to have reached an agreement, that doesn't mean both were happy with the outcome. In a statement, Cablevision blasted the Federal Communications Commission for not getting involved in the dispute and criticized Fox over the terms of the deal.
"In the absence of any meaningful action from the FCC, Cablevision has agreed to pay Fox an unfair price for multiple channels of its programming including many in which our customers have little or no interest," Cablevision said, adding that the company conceded to Fox because "it does not think its customers should any longer be denied the Fox programs they wish to see."
The signals were restored just before 7 p.m. Eastern time and the start of Game 3 of the World Series, which is carried by Fox. The deal also comes one day after Fox reached a similar agreement with satellite broadcaster Dish Network, which also was in bitter negotiations.
Terms of the deal were not disclosed, but it was no secret that Fox was seeking a long-term arrangement that would require Cablevision to pay about 50 cents a subscriber for its Fox TV stations in year one that would gradually increase to $1 dollar per-subscriber, per-month.
Cablevison said, "our customers will pay more than they should for Fox programming."
Fox countered, "These comments should not surprise anyone, and they further confirm that this entire dispute was solely about Cablevision's misguided efforts to effect regulatory change to their benefit."
Cablevision argued hard for the FCC to force Fox to accept a third-party mediator to no avail. Several politicians also put pressure on Fox, but the network did not budge, arguing that there was no need for government involvement in a business dispute. When Fox struck a deal with Dish, weeks after it had pulled 19 of its regional sports networks from the satellite broadcaster, it seemed that leverage had shifted to Fox.
In the past, broadcasters such as Fox have not been able to get cash for their local TV stations. Instead, they have launched cable networks such as FX that distributors would pay for and as part of the deal agree to carry the local TV stations. It was considered a win-win as the broadcasters got to create a new revenue stream with the cable channels and the distributors could claim to not be paying to carry local TV stations, which are available free on over-the-air television.
But with the broadcast industry struggling amidst increased competition and growing programming costs, Fox and other networks including CBS and ABC have been pressing hard to get cable operators to pay cash to carry their local TV stations. Most have been successful in that effort. Earlier this year, both ABC and Fox struck long-term deals with Time Warner Cable, and CBS reached a deal with Comcast Corp., the nation's largest cable operator, that included cash for distribution rights of its TV stations.
The nastiness of some of these disputes has left a bad taste in the mouth of not only consumers but lawmakers as well. The two-week blackout, one of the longest in the industry, saw both sides spend millions in advertising attacks and lobbying efforts. U.S. Sen. John Kerry (D-Mass.) has proposed legislation to give the FCC more clout in these disputes and to ensure that signals don't get pulled from subscribers until it is clear that both sides have exhausted every avenue to reaching an agreement.
-- Joe Flint