Cablevision and Fox are poised to battle down to the wire today over a new carriage agreement for three Fox O&Os serving New York and Philadelphia.
On Thursday, Fox rejected Cablevision’s proposal that the sides commit to binding arbitration in order to prevent the three stations — plus cablers Fox Business, Nat Geo Wild and Fox Deportes — from going dark on Cablevision systems at 12:01 a.m. Saturday.
“Binding arbitration would, unfortunately, reward Cablevision for refusing to negotiate fairly and will only ensure that more unnecessary disputes arise in the future,” Fox said in a statement. “Direct business-to-business negotiation is the only way to resolve this issue, while also preserving the long-term stability of the broadcast system. We continue to negotiate and are committed to putting all our resources towards reaching a fair resolution.”
As always, the threatened loss of sports coverage is adding urgency to the Cablevision-Fox standoff. Rep. Steve Israel (D-N.Y.) urged the sides to agree to arbitration for the sake of local football fans, who would lose access to Sunday’s Detroit Lions-New York Giants game on Fox’s WNYW. Fox affils are also carrying Major League Baseball playoff games this weekend. “In a battle between two corporations, Giants fans shouldn’t be held hostage,” Israel said.
The Fox-Cablevision scuffle is the latest flare-up amid a tense business environment between programmers and cable, satellite and telco service providers. Fox and other broadcast station owners have become more aggressive in seeking cash compensation for retransmission consent deals that allow subscription TV providers to carry local broadcast stations. Cablevision deal involves Fox affil WNYW, MyNetworkTV affil WWOR and Fox affil WTFX Philadelphia (Cablevision’s Long Island-based system serves outlying areas of the Philly market.)
Fox has led the charge for hard bargaining among broadcasters with its retrans negotiations during the past 12 months. Fox set the market ceiling for retrans fees for Big Four affiliate stations in January through its deal with Time Warner Cable, which came on New Year’s Day after a marathon 72-hour negotiation.
In March, Cablevision and Disney’s tussle over retrans for WABC-TV New York led to a nearly 24-hour blackout of the station on Cablevision, which ended a few minutes after the start of ABC’s live Oscarcast.
Fox is understood to be looking for the same kind of coin it received for its stations from Time Warner Cable: a five-year deal that started at just under 50¢ per subscriber per month for its Fox-affiliated stations (which boast the strongest sports programming) and escalates to a little less than $1 a sub by the end of the term.
In the past Fox and other broadcasters had horse-traded carriage of new channels — like Fox Business and Nat Geo Wild — in lieu of cash for their broadcast station retrans rights. But amid the recession and weakness in the local ad market last year, the major broadcast owners began focusing on retrans cash as an important new revenue source for local stations.
The aggressive posture from Fox, Disney and others has spurred cable, satellite and telco operators to petition the FCC for changes to the nearly 20-year-old retrans laws that would ban station owners from pulling signals while carriage negotiations are ongoing. Broadcasters are ready to fight any such change tooth and nail: The threat of a station going dark is often the biggest leverage point they have in negotiations.
Fox is poised for an even bigger brawl over retrans rights for its 27 broadcast stations when its retrans agreement with satcaster Dish Network expires Oct. 31.
Fox-owned cablers FX, National Geographic and 19 regional sports channels went dark on Dish earlier this month after the sides could not agree renewal terms on a separate carriage agreement. After several days of silence, sources said Fox and Dish execs on Thursday exchanged a new proposal for the cable carriage deal.