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DirecTV, Fox Networks in carriage dispute

News Corp.-owned channels could be yanked by Nov. 1

A carriage dispute has broken out between DirecTV and Fox Networks that could lead to the News Corp.-owned channels being yanked by Nov. 1 at midnight.

Fox went public with the tiff late Thursday with a statement suggesting DirecTV made an abrupt threat of dropping carriage just days after submitting a proposal to which Fox hadn’t yet responded.

“They have given us no chance to respond before taking an unnecessarily aggressive posture and going public. It is disappointing that they have chosen bad faith tactics over meaningful negotiation.”

But DirecTV countered that News Corp. is trying to gouge them for 40% increase in affiliate fees, which it deemed in its own statement as “unfair and unwarranted.”

The channels that could be affected include FX, National Geographic Channel, SPEED, FUEL TV, FOX Soccer, FOX Soccer Plus, Fox Movie Channel, FOX Deportes, and 19 regional sports networks.

The Fox broadcast network and Fox News Channel are not expected to get yanked because they are covered under separate affiliate agreements with the satcaster, but a spokesman for Fox Networks said it is possible they could be affected if the conflict escalates. The broadcast network is currently airing the World Series in primetime.

While terms of the deal were not known, the carriage deal between DirecTV and Fox Networks is known to have already expired as of Oct. 1. Signals remained on air per mutual agreement between the companies.

The timing of Nov. 1 may not be coincidental given it is on the eve of News Corp.’s annual shareholders meeting.

Pulling the plug on the Fox channels could hurt the company’s advertising revenues given DirecTV is in nearly 20 million homes across the U.S. However, DirecTV could also find itself getting bruised in the court of public opinion should the dispute drag on given consumers don’t reserve their anger over missing shows to the networks themselves, either.

DirecTV’s statement indicated that yanking channels is a last resort it may not be able to avoid.

“We hope to resolve this situation before any action is taken, but we will do what’s necessary to protect our customers from excessive and unwarranted fee increases. 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 News Corp.-DirecTV conflict is the first skirmish between programmer and distributor to go public in quite a while, though these clashes became increasingly routine last year given increasing demands for increases in retransmission consent fees.

Fox Networks got embroiled in at least three different similar standoffs in 2010, including Time Warner Cable, Dish Network and Cablevision. The latter dispute, which nearly disrupted last year’s World Series, was so heated that it brought the prospect of FCC intervention.

Fox has already signaled it intends to rally support with the launch of a website Friday called keepmynets.com.

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