UPDATE SUNDAY PM: After another session of talks today, Cablevision and Fox once again failed to make any “material progress” and remain far apart, according to a statement from Fox. Negotiations are scheduled to continue tomorrow. Meanwhile, the two sides continued their PR war with dueling statements. Cablevision once again pleaded for attention from Washington and pushed for binding arbitration: “The longer this shameful News Corp. blackout of the NFL and Major League Baseball continues, the more obvious it becomes to everyone, including political leaders of both parties, that binding arbitration is the fastest and fairest way to return Fox programming to Cablevision customers,” the company said. Fox released an open letter to Cablevision subscribers from Lew Leone, GM of the two Fox stations affected by the blackout. Here is a portion of it:
Instead of negotiating like a responsible business, Cablevision decided to make this your problem in the hope that if they caused you, the viewer, enough inconvenience, then politicians would intervene. That is what Cablevision’s call for “arbitration” is all about. But ask yourself – do you think Cablevision would be ok with someone else stepping in to decide the price you pay them for cable and broadband service?
And the Cablevision family certainly doesn’t allow arbitrators to set the rates for their cable channels like MSG and AMC. In fact, just a few weeks ago, MSG and MSG Plus went off the dial for millions of DISH Network subscribers – and MSG did not ask for arbitration.
Cablevision has called us greedy. It’s an interesting charge, given the fact that the price we’ve offered Cablevision for FOX5 and My9 is more than 70% lower than what the Cablevision family charges other cable operators for MSG and MSG Plus.
Frankly, it is hard to believe a company like Cablevision is accusing anyone else of greed. Cablevision customers pay an average of $149 per month including up to $18 for broadcast stations – and that earned them an average profit of over $795 per subscriber last year. Yet, they have only offered to pay less than a penny a day for FOX5 and My9.
UPDATE SATURDAY 4PM: Cablevision subscribers won’t be able to watch today’s Phillies-Giants game, which stars in an hour on Fox. Following the blackout of Fox’s programming on Cablevision systems at midnight ET last night, the two companies today held talks on a new carriage agreement that would restore the signal of Fox stations Fox 5 and My9 to some 3 million Cablevision customers in the New York area, but “no material progress was made and the companies remain far apart,” a source said. Both sides agreed to continue talking tomorrow when Fox carries NFL football. “It is shameful for News Corp. to use Major League Baseball and NFL games to hold viewers hostage in order to extract tens of millions from Cablevision customers,” Cablevision just said in a statement, asking News Corp. to agree to binding arbitration, something the company has rejected, and return the Fox programming on Cablevision. Since the blackout, here have been a slew of statements from officials urging Fox and Cablevision to reach a deal or keep the Fox signal on while negotiating. FCC Chairman Julius Genachowski said he was “disappointed” by the service interruption. Sen. John Kerry, who vowed to get the FCC involved if the Fox-Time Warner dispute at the end of last year escalated to a blackout, today promised a “systemic reform” of the retransmission rules system to prevent such blackouts. Meanwhile, there have been numerous complaints from Cablevision customers and advocacy groups that Cablevision broadband subscribers’ Internet access to Fox programming on Hulu and Fox.com has also been blocked by the network.
PREVIOUS FRIDAY 9PM: Another week, so another network is getting dropped in a nasty carriage dispute. But this one also affects the baseball playoffs. News Corp is already grappling with the loss of carriage of FX, National Geographic Channel, and 19 regional sports network on Dish starting two weeks ago. Now the company’s broadcast network Fox is off Cablevision after the two sides couldn’t reach an agreement on a new deal. Cablevision at midnight ET stopped carrying the local Fox
stations Fox 5 and My9 as well as Nat Geo Wild and Fox Business Network. That also puts in jeopardy the upcoming baseball playoff games and the World Series on Fox for 3 million Cablevision customers in New Jersey, New York, and Connecticut. The ALCS series between the Yankees and the Rangers runs on TBS this year. Still, it is the final stage of the playoffs, and the blackout comes only hours before the Saturday night Game 1 of MLB’s National League championship series between the Giants and the Phillies on Fox.
Fox has been aggressive in pursuing retransmission consent fees for its stations, which led to a standoff with Time Warner Cable at the end of last year. According to Mike Hopkins, president of Fox Networks Affiliate Sales, Cablevision pulled out of the negotiations at 8pm today declaring “impasse.” In its statement, Fox quoted a SNL Kagan report that “in 2009 Cablevision paid itself and charged other pay-TV companies considerably more for just two of its channels (MSG and MSG Plus) than it paid Fox for 12 of its channels.”
According to Cablevision, the company “already pays News Corp. more than $70 million a year for its channels, and News Corp. is demanding more than $150 million a year for the same exact programming.” Cablevision claims that it offered News Corp. “as much or more for Fox 5 as it pays for NBC, ABC, CBS and Univision stations in the market” but “News Corp. is continuing to demand more for Fox 5 than Cablevision pays all of the other broadcast stations combined.” Here is more from the two companies’ statements:
For the third time in less than a year, Cablevision has caused a television service disruption in the New York and Philadelphia areas by demanding preferential terms and allowing its agreements to carry WNYW FOX5, WWOR My9, WTXF FOX29, FOX Deportes, FOX Business Network, and Nat Geo WILD to expire. Beginning on Saturday, October 16, Cablevision subscribers will lose FOX5, My9 and FOX29, home of Major League Baseball’s National League Championship Series and the World Series, the NFL on FOX, American Idol, Glee, House,The Simpsons, Family Guy, the local news and other prominent programming.
“In an effort to avoid this very situation, we started this process in May and made numerous reasonable proposals to Cablevision,” said Mike Hopkins, President, Fox Networks Affiliate Sales and Marketing. “However, we remain far apart and Cablevision has made it clear that they do not share our view regarding the value of Fox’s networks. We remain willing to negotiate and hope that future talks ultimately will be productive, but as of now Cablevision has declined to counter our most recent proposal. Regrettably, their efforts were focused more on calls for government intervention than constructive negotiations.”
Cablevision spent most of Friday refusing to engage in constructive bargaining – instead issuing statements calling for the FCC and others to mandate binding arbitration. Fox rejected those demands saying that Cablevision needed to stop hiding behind a call for government intervention and negotiate in good faith. Fox stated that direct business-to-business negotiation is the only way to resolve the issue, and noted that Cablevision is being hypocritical by claiming that Fox’s proposals are not fair.
News Corp.’s decision to remove Fox programming from three million Cablevision households is a black eye for broadcast television in America. News Corp has refused to negotiate in good faith and rejected calls from dozens of political leaders to not pull the plug and join Cablevision in binding arbitration. We demand that News Corp. put the viewers ahead of its own greed and immediately restore these channels to our customers and agree to binding arbitration to reach a fair agreement.
News Corp.’s pattern of destructive tactics has become clear. First, they terrorized Time Warner Cable customers for weeks; then they pulled regional sports and cable channels off Dish Network; and now they have pulled the plug on Fox 5 and My9 for 3 million Cablevision households. Further, they are now threatening to pull their broadcast stations away from Dish Network’s 14 million customers in two weeks. It is clear that News Corp. will pull the plug on any viewer, served by any cable, satellite or phone company, to get the money they want.
On Friday, News Corp. even flatly rejected the FCC’s call for independent mediation. More than 100 political leaders called upon Cablevision and News Corp. to keep the channels on while they continued to negotiate, and 36 elected officials called upon Cablevision and News Corp. to submit to binding arbitration, to ensure no disruption of programming for customers. Cablevision agreed, but News Corp. rejected this fair approach.