News Corporation and DirecTV head toward the brink over fees


A raft of News Corporation cable properties may disappear from the channel lineup on satellite MVPD DirecTV on 11/1/11 if an agreement is not reached on a new carriage fee. Fox cable news properties are not affected, but FX, National Geographic and a number of regional sports properties are on the bubble.

News Corp. went through a similar battle with DirecTV principal competitor, DISH Network, in a dispute which was not concluded until the News Corp. channels went dark on DISH for about a month.

According to reports, DirecTV says it already pays News Corp. almost a billion dollars for the channels, and is dismayed that the programmer is seeking an increase in the neighborhood of 40%.

NC, which said it was willing to keep its programming alive on the MVPD while continuing to negotiate, said the 40% claim was not true and otherwise expressed its disappointment in DirecTV’s approach to the dispute.

For now the dispute concerns only the cable channels, but DirecTV’s retrans deal for the Fox O&Os apparently runs out on New Year’s Eve, so this could become a bigger fight in a couple of months.

News Corp. 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.”

And guess what — this may just be Round 1. The carriage agreement between the two parties for Fox O&O television stations expires at the end of the year. The NFL play-off schedule on Fox will figure in that negotiation in the DMAs where Fox has the broadcast license for its own affiliate.

RBR-TVBR observation: When disputes of this nature involve broadcast television stations, hardball-playing MVPDs run right to the FCC and cry foul. So shouldn’t they be calling for government intervention when its MPVD distributors v. MVPD programmers?

Our question is how much we personally are paying to have FX on our system, a channel we never ever watch. There are quite a few local broadcast stations we’d gladly pay for, but frankly, we don’t want to be forking over the amount of cash it would take to get News Corporation any where near $1B for channels we don’t use at all.

Rocco Commisso of Mediacom recently suggested what was once unthinkable for US MVPDs – an a la carte program menu option for MVPD subscribers. Other MSOs quickly shot that idea down, but the more people see the price tags for some of these basic cable channels, the closer the concept is going to get to being the new reality.