Network says cabler's proposal for stations alone is 'not acceptable'

Cablevision fouled out in its 11th-inning effort Wednesday to reach a deal to restore Fox stations to its air before the first pitch was thrown in Game 1 of the World Series.

Fox quickly rejected Cablevision’s offer of a one-year deal for its Gotham and Philadelphia Fox O&Os alone as a “publicity stunt.” By the early evening, the Great Gotham Blackout of 2010 was heading into its 13th day, and Cablevision vowed to reimburse its customers who paid for a webcast of the Fall Classic games on MLB.com.

Earlier in the day, Cablevision went public with an offer to pay the same price that Fox charges Time Warner Cable for carriage of Fox O&Os WNYW New York and WTXF Philadelphia for a one-year period.

Fox has used its Time Warner Cable retrans pact as a benchmark in the Cablevision negotiations because it is contractually bound through a favored-nations clause to ensure that Time Warner Cable does not pay a higher rate for the stations than any other subscription TV provider. But Fox’s deal with Cablevision encompasses Fox’s other Gotham station, WWOR, plus other Fox-owned cablers, and it runs for a five-year term.

Fox and Cablevision had gone back and forth on a three-year deal for the stations and other channels before talks broke down last week following the Oct. 16 blackout for the cabler’s 3 million customers in New York, New Jersey and Connecticut. Fox’s exclusive TV rights to the World Series added extra urgency to the sparring between the sides on Wednesday.

“Cablevision is seeking a discounted ‘package rate’ without buying the entire package,” Fox said in a statement. “We have told Cablevision all along we are willing to negotiate a deal — based on an entire suite of channels — under the terms we have reached with Time Warner Cable and other providers,” or a standalone deal for the three stations.

Cablevision sent the one-page offer to Fox execs on Wednesday, after which execs from both companies spoke by phone. It’s understood that Cablevision rebuffed Fox’s effort to discuss a deal encompassing other channels similar to the structure of its pact with Time Warner Cable.

“It is now clear beyond a shadow of a doubt that News Corp. is operating in bad faith. We call on the FCC to intervene immediately to restore the Fox signals to Cablevision’s 3 million homes and order News Corp. to agree to binding arbitration to resolve this conflict,” Cablevision said in a statement.

But Cablevision’s hopes for FCC intervention dimmed when a senior FCC official weighed in with a blunt message for the cable giant: “Stop the stunts and start negotiating.”

Cablevision has pushed for the FCC to intervene and mandate that the sides go to binding arbitration to settle the retransmission fee dispute.

Late last week the FCC requested info from both sides on the history of the year-long negotiations process that led up to the blackout of the stations for Cablevision’s 3 million subscribers in New York, New Jersey and Connecticut.

After reviewing the info submitted by Cablevision and Fox on Monday and the responses sent on Tuesday, the FCC seems unmoved by Cablevision’s assertion that News Corp. has violated the provision of the retrans law that mandates good-faith negotiations between a broadcast station owner and subscription TV provider. The FCC seemed irked that Cablevision prexy-CEO James Dolan sent a letter Tuesday to FCC chairman Julius Genachowski urging him to call a meeting at the FCC for him and News Corp. prexy Chase Carey.

“They should spend less time writing publicity-seeking letters to the FCC, and more time at the negotiating table reaching an agreement,” a senior FCC official said late Tuesday. “By now the message from the FCC should be crystal clear: Stop the stunts and start negotiating.”

Cablevision maintains that Fox has refused to budge on the financial terms on the table for carrying its Gotham and Philadelphia stations.

“There has been absolutely no movement by Fox in their attempts to gain massive fee increases from Cablevision customers to carry broadcast signals that are free over the air,” Charles Schueler, Cablevision’s exec veep of communications, said about three hours before the company extended its one-year offer to Fox. “We do not understand how protecting and interceding on behalf of TV viewers in 3 million blacked out households in the Northeastern United States does not fall under the FCC’s purview. The FCC has the facts and our customers are demanding that the FCC act.”

As it became apparent that there would be no deal in time for the start of the World Series, Cablevision issued a statement vowing to reimburse subscribers who pay to watch the games on MLB.com. Cablevision said subscribers who sent in purchase confirmations from MLB.com would receive a $10 credit on their bill.

Wall Street has been watching the Cablevision-Fox battle closely, but so far the scuffle has not had a noticeable impact on Cablevision’s stock price. Cablevision shares closed on Wednesday at $27, up 52¢, compared to a closing price of $26.66 on Oct. 15, the day before stations went dark.

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