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Analyst: Cablevision Can't Win Fight With Fox

As tonight’s deadline looms in the retransmission dispute between News Corp. and Cablevision Systems, one analyst warns that this is a battle the cable operator can’t win.

As opposed to other face-offs Cablevision has had with programmers this year, this “battle is fundamentally different as high-profile ‘local’ sports would be affected over the next two weeks-starting with the NFL Giants game this Sunday on Fox, and with the Yankees potentially in the World Series in a couple of weeks,” says Richard Greenfield of BTIG Research.

“Given how critical NFL games are, Cablevision’s positioning in this retrans debate is actually worse than Dish’s current programming Battle with Fox. That should imply a settlement either before the midnight deadline (morning of October 16th) or sometime prior to October 17 at 1 p.m. (when NFL games kick-in on Fox),” he says.

A deal would be done on Fox’s terms because of the leverage the broadcaster commands and its focus on capturing significant retrans dollars.

Greenfield, who has been recommending buying Cablevision shares, says that if Fox does go dark, those shares would be negatively impacted near-term.”We believe the loss of Fox programming is simply a bad decision if it happens. CVC will lose subscribers at a far faster pace than its prior battle given the timing of key sporting events. Most importantly, those lost subs are incredibly difficult to win back in the future.”

In his report, Greenfield lays out what to expect this weekend. “News Corp. is not going  to give an inch, we highly doubt the government (FCC) is going to get involved if the Fox signal gets pulled and Cablevision cannot be without Fox programming for more than a few days (it might be able to survive this weekend), but if the Yankees win in the ALCS, the World Series on Fox will lead to brutal sub losses at CVC in Q4 2010 (CVC got lucky that the ALCS this year is on TBS, vs. Fox).”

In an interesting side note, should Fox remove its signal from Cablevision, it will have pulled the plug on all four major sports, with NHL and NBA (pre-season) games on the Fox regional sports network off Dish Network and NFL and MLB off Cablevision. The deadline for Dish losing the NFL and MLB as well is at the end of the month.