Fox Looks To 'Keep On' Time Warner Cable Systems In Retrans Dispute

In a looming retransmission-consent battle, Time Warner Cable isn't the only one looking to get tough.
In what appears to be a direct rejoinder to Time Warner Cable's "Roll Over or Get Tough," an initiative aimed at educating consumers about rising programming costs, News Corp. has set off its own media blitz for some of its cable networks, as well as Fox Broadcasting properties, running ads on television and in print and creating a Web site ( to show viewers what they could be missing if a carriage agreement with the No. 2 MSO isn't reached by Dec. 31.
The carriage deals affect about 13 million Time Warner Cable subscribers (3.9 million for the broadcast stations) and include Fox TV stations in New York; Los Angeles; Austin, Texas; Dallas; Detroit; Orlando and Tampa, Fla.
Also in danger of being dropped are Fox cable channels FX, Speed, Fuel TV, Fox Movie Channel, Fox Reality Channel, Fox Soccer Channel and Fox Sports en Espanol, plus nine regional Fox Sports networks (FS Arizona, Florida, Houston, Midwest, Southwest, West, Prime Ticket, SportsSouth and Sun Sports.

According to Fox, if a deal is not reached Time Warner Cable subscribers would miss major sports programming like the National Football League playoffs (including the NFC Wildcard game on Jan. 10; the NFC divisional playoffs on Jan. 16 and 17 and the NFC Championship on Jan. 24), the BCS college football bowl games (including the All State Sugar Bowl Jan. 1, the AT&T Cotton Bowl Jan. 2 and the Fed Ex Orange Bowl on Jan. 5), as well as the season premiers of broadcast staples American Idol (Jan. 12) and 24 (Jan. 18) and fresh installments of medical drama House (Jan. 11).

News Corp. has reportedly been asking for $1 per month per subscriber for its TV stations and has been pressuring affiliate station groups to allow it to conduct negotiations for their retrans deals. Time Warner fired the first salvo in their negotiations with Fox, filing a comment with the Federal Communications Commission earlier this month claiming that Fox "hijacked" its most recent retrans talks with affiliate Sinclair Broadcast Group. According to the FCC comment, which Time Warner Cable filed in support of Mediacom Communications' dispute with Sinclair, Fox threatened that any deal reached with affiliates could be vetoed by the network. Time Warner Cable extended its pact with Sinclair for one year, a term that the cable operator stressed was not the industry standard.
Time Warner Cable spokeswoman Maureen Huff said that negotiations with the broadcaster "are ongoing, but Fox's cost demands are unreasonable and excessive, especially in light of the economic climate."
Fox isn't the only network group that could fall off Time Warner Cable systems by year end - the MSO is in negotiations with Scripps Interactive's Food Network and Great American Country, The Weather Channel and Starz Entertainment services - but it is certainly the largest.
Fox counters that it is asking only for a reasonable for the value it provides to cable operators. According to the Web site, Fox claims that the amount it is asking for all of its networks is in the same ballpark as what Time Warner Cable pays for one network (ESPN at about $4 per subscriber, per month) and that based on its comparable cost of programming, could charge as much as $4 to $5 per month per subscriber.
"Moreover, Fox attracts more viewers than the five most expensive cable networks combined (ESPN, TNT, USA, ESPN2 and NFL Net)," the programmer stated. "The bottom line is that the Fox stations feature some of the nation's most-watched programming with shows such as 24, American Idol, House, Glee, and The Simpsons, as well as the most compelling sports on television with the NFL, Major League Baseball, and NASCAR. The price being asked for as compensation for all this value is extremely reasonable."
Fox is also urging Time Warner Cable customers to switch to alternate providers like Verizon Communications' FiOS and satellite services DirecTV or Dish Network if an agreement cannot be reached. That threat is not lost on Time Warner, but the MSO added that those other providers could soon find themselves in the same boat.
"Customers can switch, but need to understand that every provider, including satellite and telco companies, faces rising programming costs and potential disputes," Huff said.
In a research note, Pali Research media analyst Richard Greenfield wrote that the dispute has the makings of a "Battle Royale' - in addition to the NFL playoffs and college bowl games, the last week of the NFL season is Jan. 3 and includes two contests with teams inside Time Warner Cable's footprint (New York Giants vs. Minnesota Vikings and Philadelphia Eagles vs. Dallas Cowboys).
And though Time Warner will probably take a subscriber hit in the dispute, the impact may not be that bad, Greenfield wrote. In New York, which is dominated by apartment buildings, satellite service is not always feasible and FiOS service is not available in every area. In addition, the analyst said that News Corp. may not want to attract the extra regulatory scrutiny that may come with a protracted and public retrans battle in major markets.
"Fox has the upper-hand, leverage-wise, but the battle is not as lopsided as it appears at first glance and the risk of regulatory intervention is not in anyone's best interests," Greenfield wrote. He added that he would expect that after some chest-thumping, Time Warner will agree to a 50- to 60-cent fee for the broadcast stations within days after the Fox signals are dropped.
Mike Reynolds contributed to this report.