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SBD/Issue 76/Sports Media
Bowl Game Blackouts Avoided As News Corp., TWC Reach New Deal
Published January 4, 2010
|News Corp., TWC Deal Prevents Any
Disruption Of Service, Football Game Blackouts
DEAL DETAILS: Pali Research's Rich Greenfield speculated that Fox and TWC reached an agreement when both sides compromised. He wrote Fox likely reduced "its demands for cable network distribution and sub fee growth at FX and the RSNs, in return for cash retrans for the Fox network that likely averages out to north of $0.50/sub/month over a 4-6 year term." Greenfield also suggested that TWC's payment could reach as much as $0.75 in the last year of the deal. While the cash retrans undoubtedly will help Fox, Greenfield also said that the underlying broadcast business model "remains challenged" (John Ourand, THE DAILY). DAILY VARIETY’s Cynthia Littleton notes the agreement is “believed to run for at least three years, and the fees Time Warner pays Fox will escalate over the term of the deal.” A source said that the fee structure will rise to the $0.50-0.60 range by the final year of the contract. Also wrapped up in the negotiations were “new carriage deals for a number of Fox-owned cablers including FX, Speed TV, Fuel and 10 regional sports cablers,” and sources said that some of the retrans money TWC will pay could also “incorporate compensation and other consideration (such as marketing and promo support) for those cable outlets.” Littleton writes what “broke the Fox-Time Warner impasse was the face-to-face huddle and the threat of a political firestorm erupting if they didn’t come to terms” (DAILY VARIETY, 1/4). Fox “granted extensions in three-hour increments” to keep the Fox-owned stations on the air while talks continued Friday (DAILY VARIETY, 1/2).
SETTING A BENCHMARK? In L.A., Joe Flint wrote the “bad news” for TWC customers is “their cable bill may go up.” Securing fees from TWC is “viewed as an important win” for Fox, but TWC can still “claim that it did its part for consumers by holding down the cost of monthly cable TV bills by not caving in to Fox’s demand for $1 per subscriber” (LATIMES.com, 1/1). The WALL STREET JOURNAL’s Ovide & Worden noted the deal ends a “fierce television-programming dispute that each side had characterized as a crossroads for the television business” (WALL STREET JOURNAL, 1/2). DAILY VARIETY’s Littleton noted the “high-public profile” of the Fox-TWC dispute put a “klieg light on the overall issue of retransmission consent, which is sure to spur more brawling between broadcasters and cable operators in the coming year.” Cable operators are “alarmed by the prospect of a triple-digit increase in programming costs and have every incentive to play hardball with station owners” (DAILY VARIETY, 1/2).
Moonves Aiming For $250M
Annually In Retransmission Fees
SINCLAIR, MEDIACOM REACH SLIGHT EXTENSION: The AP’s Nigel Duara reported Sinclair Broadcasting Group and Mediacom have “agreed to extend by eight days their negotiations over fees,” allowing football fans to watch college bowl games. The deadline was extended to midnight on January 8, and during the extension, Mediacom “will pay Sinclair a higher rate than it was paying under the contract” that expired Thursday. About 700,000 Mediacom subs were “at risk of losing Sinclair programming.” Sinclair Exec VP & General Counsel Barry Faber: “We recognize that several of the impacted markets have college teams that will be playing in the BCS Bowl games” (AP, 1/1).
MISSING THE GAME DESPITE SETTLEMENT: In K.C., Kellis Robinett reported with the Fox-TWC dispute settled, everyone who normally receives FS K.C. “was supposed to get” Sunday’s South Dakota-Kansas State men’s basketball game. But because of “technical difficulties, the game was never telecast.” FS K.C. Senior VP & GM Jack Donovan: “We were unable to show Sunday’s game live as planned because of a problem with the satellite uplink facilities provided by a third party” (K.C. STAR, 1/3).