It’s not looking good for an 11th-hour accord between Fox and Time Warner Cable before the Thursday night expiration of Fox’s retransmission consent agreement with the nation’s second-largest cable operator.
The sides can’t even agree on whether they have held negotiations during the past several days.
If the impasse drags on this week, it’s likely that the Fox O&O stations in key markets including New York, Los Angeles and Dallas will go dark on Time Warner Cable systems at 12:01 a.m. Friday. The disruption would also involve Fox-owned cablers whose carriage agreements expire at year’s end, including FX, Speed, Fuel TV and regional sports cablers serving 11 major markets.
Fox sources indicated that there had been minimal contact between the camps during the past few days and no discussions of substance. Time Warner Cable insider disputed that characterization and said execs had been working on the Fox issues throughout the week, despite the Christmas holiday.
The biggest obstacle in the way of a new agreement is, of course, money. Fox is pressing for a retransmission consent fee of about $1 per subscriber for its 15 O&O stations in markets served by Time Warner Cable. Fox, like CBS and other broadcasters, is dead set on commanding far more coin from its cable retrans deals at a time when the traditional ad-supported broadcasting biz is under pressure from rising costs and dwindling advertising returns.
Stations affiliated with the Big Four networks remain among the most-watched channels for cable operators, and Fox is arguing that it should be compensated accordingly, particularly as it provides pricey franchises like the NFL, “American Idol” and other top-rated series.
Time Warner Cable asserts that the decision on whether Fox programming will be yanked is in Fox’s hands, because the cabler cannot legally continue to transmit the Fox station signals after Friday unless it has Fox’s written permission.
We’ve been saying for quite some time we hope they don’t pull the programming while we continue to negotiate,” said Time Warner Cable spokeswoman Maureen Huff.
Both sides have mounted aggressive PR campaigns to spin their positions to viewers, complete with websites and ads running in target markets. Fox warned that viewers could miss high-profile football games, including Fox’s slate of bowl bouts next week, and the Jan. 12 return of “American Idol.” Fox is encouraging viewers in affected Time Warner markets to look into cable alternatives such as satcaster DirecTV or Verizon’s Fios telco service, while Time Warner Cable is positioning itself as holding the line against high price increases that would only have to be passed on to its subscribers.
A Fox spokesman indicated that the O&Os and cable nets are bracing for the plug to be pulled come New Year’s Eve.
Unless there’s some substantial change in Time Warner’s negotiating posture, we’re not optimistic that an agreement is going to be reached before Dec. 31,” the spokesman said.