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Analyst Says Fox-Cablevision Battle Factored into Stocks

As News Corp. and Cablevision Systems' face-off
over retransmission fees nears its Oct. 15 deadline, one analyst says he's
already factored the outcome into his earnings estimates for the two companies.

In a research note distributed Wednesday, David
Joyce of Miller Tabak + Co. notes that News Corp. and Cablevision "are still in
contentious last-minute negotiations," with Cablevision saying it already pays
News Corp. $70 million a year for its channels and that the programmer is
seeking $150 million. (Those figures include some networks whose distribution
deals are not expiring this month, but might be included in a new agreement.)

Meanwhile, he notes News Corp. claims Cablevision
is taking "cheap shots" at Fox and that it already pays more for Madison Square
Garden network channels than all 12 Fox channels.

While it's unclear exactly how the battle will play
out, especially since World Series games featuring the New York Yankees could
come into play, Joyce says the financial facts are not likely to deviate from the
estimates he's already made.

"We make no CVC estimate changes at this time as
they will likely pass through these increases to customers (although timing of
rate increases may be a factor that could affect margins temporarily) and is
reflected in our programming cost estimates," he says. By the same token, "we
have increases in NWS carriage and retransmission fees also in our model, so we
are making no changes there."

In his report, Joyce estimates that Cablevision pays about $8.6 million
a year for WNYW-TV and WWOR-TV in New York, and estimates that News Corp. is
seeking $34 million a year. The cable networks whose deals are expiring
are Fox Business Channel, which Cablevision currently pays $3.7 million a year
for, National Geographic Wild at $2.9 million and Fox Deportes at $500,000.
Joyce estimates News Corp. is seeking $18.4 million, $14.7 million and $2.3
million a year, respectively, for those channels in its new contract.