Policy

Fox Networks, DirecTV Face Nov. 1 Carriage Deadline

10/24/2011 12:01 AM Eastern

DirecTV and Fox Networks are gearing
up for one of the bigger non-broadcast-channel carriage
disputes of the year, with the programmer saying the
satellite-TV provider is ready to pull the
plug on a swath of entertainment and
sports networks unless the two sides
reach an agreement by Nov. 1.

According to Fox, DirecTV has said it
will pull FX, National Geographic Channel,
Speed, Fuel TV, Fox Soccer, Fox
Soccer Plus, Fox Movie Channel, Fox Deportes
and the 19 Fox regional sports networks,
unless a deal can be reached by
the day its existing carriage agreement
with the content giant expires.

Fox told DirecTV it could continue carrying
the channels under their current
prices and terms, but DirecTV declined
that offer, according to Fox.

40% FEE HIKE?

“DirecTV sent us a proposal on Tuesday
afternoon [Oct. 18],” Fox said in a statement.
“They have given us no chance to respond before taking
an unnecessarily aggressive posture and going public. It
is disappointing that they have chosen bad-faith tactics over
meaningful negotiation.”

DirecTV said Fox is demanding a 40% increase in carriage
fees and if a deal is not reached, it said, “we will be forced to
suspend the channels as early as Nov. 1.”

Fox has countered that the 40% increase claim is “ridiculous.”

“What we are trying to do is keep the services intact for
our customers,” DirecTV executive vice president of content
strategy and developement Derek Chang told Multichannel
News
. “We would like nothing better than to have an uninterrupted
continuation of programming for customers. We
have been negotiating for months, and there has been very
little progress and very little movement.”

In the current economic climate, especially, a 40% increase
is difficult for the company and its customers to bear,
Chang said: “At some point we’ve got to fight for our customers
and put a stop to this stuff .”

As for the Fox offer of continued carriage, Chang said
DirecTV does not want to “perpetuate the situation,” adding
that most of the channels up for renewal are not ratings
powerhouses. “At some point, we can’t keep having customers
sign up and paying for channels they really don’t have
much interest in.”

(Fox points out an outage would mean DirecTV customers
could miss National Hockey League and college football
games on regional Fox Sports Networks and the last
three episodes of Sons of Anarchy on FX, a development that
prompted SOA creator Kurt Sutter to use some bad language
on Twitter Friday while urging subscribers to “call them, tell
them if they do, you’ll pull your service.”)

The Fox dispute is the latest in what could be a contentious
period of negotiations on both the cable and broadcast front.
In addition to the Fox spat, DirecTV is racing against a Nov. 1
deadline to reach a retransmission-consent agreement with
Belo Corp.’s 20 broadcast TV stations in markets like Portland,
Ore.; Seattle; Dallas; and Houston.

On the cable side, Mediacom Communications recently
reached a retransmission pact with LIN Media after more
than a month, and said it has to reach 75 more deals with 180
stations before the end of the year. American Cable Association
president Matt Polka said last week that its 900 members
have to reach retrans deals before Dec. 31 or face blackouts
on a massive scale. (For more on that situation, see Finance.)

ECHOES OF DISH SPAT

DirecTV is the largest satellite-TV service provider in the
country and the second largest multichannel video service
provider (after Comcast), with 19.4 million customers.

The spat is reminiscent of an earlier dispute Fox had
with Dish Network concerning the same channels. Fox
pulled FX, National Geographic Channel and 19 Fox
Sports Net regional sports channels on Oct. 1, 2010, from
14.3 million Dish Network subscribers after it failed to
reach a deal. Those networks stayed dark to Dish customers
for nearly a month. A deal was reached just prior to
the expiration of Dish’s retransmission agreements with
20 Fox owned-and-operated broadcast stations across the
country.

According to its keepmynets.com website highlighting
the DirecTV dispute, Fox noted that agreements with the
satellite giant for 18 stations in 12 markets, including Los
Angeles, Dallas and Houston, are set to expire soon.

Chang said DirecTV’s retransmission deals with the Fox
stations expire “before the end of the year,” saying that will
have no bearing on its current negotiations.

“We’re dealing with what is on the table right now,”
Chang said.

September