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News Corp. and DirecTV at odds over new TV deal

October 20, 2011 |  9:10 pm

More than two dozen News Corp.-owned cable channels may go off satellite broadcaster DirecTV on Nov. 1 if the two companies can't reach an agreement on a new distribution agreement.

On Friday, DirecTV, which has more than 19 million subscribers, started informing its customers that it will drop the News Corp. channels, including FX, the National Geographic Channel, 19 regional sports networks including Fox Sports West and Prime Ticket, which serve the Los Angeles market and a handful of other sports channels. Not part of the dispute are the Fox broadcast network or Fox News.

DirecTV said News Corp. is demanding an increase of 40% in subscriber fees for the channels. The company did not go into specifics on the exact terms News Corp. is seeking.

"We already provide News Corp. nearly a billion dollars a year for their channels, and we have no problem continuing to compensate them fairly," the satellite broadcaster said in a statement, adding that the deal being offered is "unfair and unwarranted."

A spokesman for News Corp.'s Fox Networks called the 40% claim "ridiculous" and added that the company has been willing to allow DirecTV to continue to carry the networks at the current rate while a new deal is hammered out. 

Although disputes between programmers and distributors over carriage deals are fairly common, this one has an interesting twist: News Corp. President Chase Carey previously was the chief executive of DirecTV for several years and is well versed in its finances.

The feud with DirecTV is one more headache for News Corp. as it prepares for its annual meeting with shareholders Friday. That meeting was already expected to be heated in the wake of the phone hacking scandal at News Corp.'s now-closed British tabloid News of the World. That scandal hurt the company's stock price and has led to investigations into News Corp. in both Britain and the United States.


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-- Joe Flint

Photo: DirecTV dish. Credit: AP