Fox, Time Warner Cable reach deal

Pact comes after marathon negotiating session

After a marathon two-day negotiating session, Fox and Time Warner Cable execs on Friday have come to terms on the contentious retransmission consent agreement that threatened to knock numerous Fox channels off Time Warner Cable systems.

Deal came together after an all-night New Year’s Eve stint at the bargaining table that extended into lunchtime today for top execs at both companies. Both sides refused to comment on financial terms of the multiyear pact.

“We’re pleased that, after months of negotiations, we were able to reach a fair agreement with Time Warner Cable — one that recognizes the value of our programming,” said Chase Carey, News Corp. chief operating officer, in a statement.

Time Warner Cable chief said he was gratified to have “reached a reasonable deal with no disruption in programming for our customers.”

Fox had been seeking a monthly fee of $1 per subscriber in exchange for Time Warner’s right to retransmit 14 Fox-owned stations in nine markets served by Time Warner. Time Warner was believed to be offering about 30 cents per sub as late as Thursday afternoon. The negotiations also involved carriage agreements for Fox, Speed, Fuel TV and other Fox-owned cable outlets which also had a Dec. 31 expiration.

As the midnight deadline approached Thursday, Fox granted extensions in three-hour increments to keep the channels on the air while execs kept huddling.

The high-public profile of the Fox-Time Warner Cable clash put a klieg light on the overall issue of retransmission consent, which is sure to spur more brawling between broadcasters and cable operators in the coming year. Broadcasters, especially Big Four network affils, are focused on wringing far more coin out of cable operators for the right to carry their stations signals, which remain among the most-watched channels on the cable dial and serve up exclusive programming and sports franchises. Cable operators, not surprisingly, are alarmed by the prospect of a triple-digit increase in programming costs and have every incentive to play hardball with station owners. The Fox-Time Warner deal is seen as setting an important benchmark for what the cable market will bear for retrans deals in the coming year or so.

The high public profile of the Fox-Time Warner fight — complete with TV and newspaper ads and dueling websites to spin their cases to viewers — grabbed the attention of prominent pols, including Sen. John Kerry (D-Mass.), who sits on the Senate Commerce Committee and chairs its communications-focused subcommittee, and FCC chairman Julius Genachowski. The threat that Time Warner customers might have lost access Fox channels on the New Year’s holiday weekend could spur lawmakers to take steps to ensure that consumers don’t get caught short by other broadcast vs. cable showdowns to come.

Genachowski issued a statement Thursday afternoon urging Fox and Time Warner to agree to a temporary extension to avoid disruption of service to consumers. Also Thursday, another TV station owner, Sinclair Broadcast Group, did just that with cable operator Mediacom, cutting an eight-day extension that kept Sinclair-owned stations, many of them Fox affils, on in 11 states, including such markets as St. Louis, Milwaukee, Nashville and Tallahassee, Fla. Sinclair and Mediacom’s retrans talks have been so rough that Mediacom filed a complaint against the Baltimore-based Sinclair at the FCC last month, accusing the company of failing to negotiate in good faith.

Mediacom’s complaint also asserts that the Fox network is pushing Sinclair to seek a big fee increase because the network intends to force affils to fork over a large portion of their retrans gains to the network, to help cover the costs of primetime programming and sports packages. Top execs at Big Four congloms have indicated they’ll need contributions from affiliates in order to keep the network biz afloat. But at a time when local stations are also struggling to survive, the issue of who gets to keep those retrans fees is sure to spur intramural net-affil brawls as well.

Meanwhile, overshadowed by the Fox-Time Warner headlines was another cable contract fight that went down to the wire on New Year’s Eve. Scripps Networks has pulled Food Network and HGTV from Cablevision systems serving areas of New York, New Jersey and Connecticut in a contract renewal battle.

Scripps said that Cablevision pays less than 25 cents a month per subscriber for both channels, and that it was asking for less than $1 per sub for Food and less than 73 per sub for HGTV. Scripps has launched websites and iloveHGTV in an effort to ramp up viewer pressure on Cablevision, which has more than 3 million subs.

Cablevision said flatly that the company had “no expectation of carrying (Scripps) programming again,” and it pulled no punches in offering its perspective on the source of the fee dispute.

“We are sorry that Scripps’ current financial difficulties are making it impossible for them to continue our relationship on terms that are reasonable for Cablevision and our customers,” the statement said.

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