DirecTV Inc. signed a multiyear retransmission-consent
agreement with Fox Entertainment Group last week to broadcast signals from Fox Television
Stations Inc.'s 22 major-market stations.
The deal is contingent upon congressional action supporting
local-to-local satellite delivery, and DirecTV may choose not to deliver local-to-local
service in all of those 22 markets.
As part of a breach-of-contract settlement with Fox parent
News Corp., EchoStar Communications Corp. announced last November that it had negotiated a
three-year retransmission agreement allowing EchoStar's Dish Network direct-broadcast
satellite service to rebroadcast Fox's owned-and-operated stations.
DirecTV senior vice president of new ventures Steve Cox
characterized the retransmission negotiations as "not unlike" such deals made in
the cable industry, in that broadcast-network carriage was part of larger discussions.
"As a major distributor of content for News Corp. in
the United States, we're in continuous talks," Cox said, adding that retransmission
consent came up in the normal course of negotiations once DirecTV saw that local-to-local
legislation was on track.
Fox has not asked for a per-subscriber payment in exchange
for retransmission consent, Cox said. He added that the popularity of local-to-local
service should drive DirecTV's penetration, which, in turn, should benefit News Corp. by
beefing up subscriber numbers for its cable channels.
This past summer, DirecTV added News Corp.'s FX cable
network, followed by Fox Sports World in September. And according to one industry insider,
DirecTV will move Fox News Channel to a more highly penetrated programming package
following the retransmission negotiations.
"It would be misleading to assume that there's a
direct tie between any specific carriage and the retransmission consent," Cox said.
"There's no specific give or take that you could pinpoint."
Tellus Venture Associates president Steve Blum said
carriage-for-carriage or quid quo pro agreements have been prevalent in cable, adding that
such retransmission negotiations allowed cable networks including MSNBC and FX to gain
footholds on cable channel lineups.
But Blum does not believe DirecTV, EchoStar or any
multichannel provider will ultimately have serious trouble landing
additional-retransmission consent deals as needed.
"I don't think any TV station is going to want to be
kept off one platform or another," he said. "To a TV station, distribution is
EchoStar chairman Charlie Ergen has been fighting for
legislation to ensure that broadcasters offer retransmission consent under equal terms to
all multichannel-video providers.
Cox said that while DirecTV favors equal terms for all
providers, "We feel that a negotiated solution is better than a litigated one."
DirecTV is concerned that government-mandated terms may be open to court appeals that
could delay the launch of local-to-local services.
DirecTV has been in ongoing negotiations with other
networks and station groups concerning similar deals, Cox said, and additional
announcements could be forthcoming before congressional legislation is passed.
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