Fox, Cablevision meet to discuss fees as blackout looms
update at 6:40 p.m.:
A source familiar with talks said the Federal Communications Commission has urged the parties to extend their talks into early next week if they are unable to come an agreement by thier midnight deadline to avoid a potential television blackout.
Fox and Cablevision executives are meeting in New York this afternoon to try to resolve their fees dispute. As the midnight deadline to reach a deal nears, analysts say broadcast and cable/satellite disputes are reaching a fever pitch that federal regulators and lawmakers may not be able to ignore.
According to sources at Fox, which is owned by News Corp., and Cablevision, officials met to discuss an increase in fees demanded by Fox to carry its channel to Cablevision’s New York and New Jersey customers. Cablevision says Fox demanded $150 million in annual fees, more than double its previous agreement and more than all fees negotiated with ABC, NBC and CBS combined. Fox declined to comment about that figure.
In a now familiar routine, negotiations are going down to the wire, threatening 3 million Cablevision subscribers with a blackout of several national football and baseball games this weekend.
Federal Communications Commission chairman Julius Genachowski last Thursday said the agency is looking into retransmission fee negotiations and said his staff has worked with parties in past disputes to resolve their differences. But he did not indicate whether the agency would intervene.
Communications policy experts say that broadcasters have been more recently emboldened to demand more for their content, feeling that they have been underpaid in the past.
“It seems like the importance of each of these fights sets the precedent for the next fight,” said Marvin Ammori, a law professor at the University of Nebraska and advisor to public interest group Free Press.
Ammori said broadcasters are in a strong bargaining position because they possess the sports channels that are most in demand by viewers. Increased competition by telecom companies such as Verizon and AT&T to provide paid video services also help broadcasters, who dispute that the FCC has the authority to take on any regulatory measures in such disputes.
According to Bloomberg, television blackouts have reached their highest level in a decade. Over the past year, fee disputes have led broadcasters to pull their signals five times in separate contract fights.
Lawmakers have called for broadcasters to go into arbitration to resolve the disputes.
“While we’re skeptical the FCC will intervene at this time in the retransmission disputes, the more that programming disputes escalate and signals get pulled -- particularly if they disrupt high-profile sporting events -- the more pressure we believe there will be on the FCC and Congress to do something to prevent such consumer disruptions, and that could affect broadcaster leverage,” said Rebecca Arbogast, an analyst at Stifel Nicolaus.
| October 15, 2010; 2:35 PM ET
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