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Cable Operators

DirecTV’s Disney, Fox Deals Expired

10/25/2004 11:25 AM Eastern

DirecTV Inc. is out of contract with cable networks owned by The Walt Disney Co. and Fox Entertainment Group, a sister company to the direct-broadcast satellite provider, which is continuing to offer the services.

Sources said the parties are continuing to negotiate, as DirecTV's deals with both programming entities expired Sept. 30.

An ESPN spokeswoman declined to comment. A Fox spokeswoman said, "We're continuing to negotiate in good faith with DirecTV."

A DirecTV spokesman would only say, "We have strong relationships with both Disney and Fox. We don't comment on terms and conditions of contracts. We look forward to continuing to offer their programming.”

News of the contract expiration was reported in the Oct. 25 edition of Sports Business Journal, which indicated that ESPN is proposing that DirecTV accept the same distribution pact that Cox Communications Inc. reached earlier this year -- a deal with 13% annual licensing-fee increases, versus the 20% yearly hikes under the old contract.

The report noted that DirecTV wanted a "most-favored-nation" provision ensuring that the DBS company would get the same pricing deal as any cable operator, including the nation's largest MSO, Comcast Corp.

On the Fox side of the ledger, SBJ said deal terms hinge on the company receiving compensation for retransmission rights to the Fox broadcast network. Historically,

cable and satellite providers haven't paid money for retransmission consent.

September