• The Hollywood Reporter on LinkedIn
  • Follow THR on Pinterest
DEC
31
5 YEARS

News Corp. president: Fox likely going off the air

Fox vs The latest update from THR, below. Even now, down to the wire, I'm still betting on a resolution between News Corp and Time Warner before Fox fires its big entertainment programing guns in January ("Idol," "24"). So either before the Sugar Bowl tomorrow, or things will go dark for about a week (list of Fox premiere dates here). Also, if Time Warner thinks they're getting beat up now, they better pray News Corp. doesn't decide to really let loose Fox News.

Oh, another thing. Here's a selection of entertaining quotes from Fox spokesman Scott Grogin, who's exactly the sort of guy you want defending your company in this fight:

Re: The claimed 300% increase Fox is asking for -- "That is grossly inaccurate. TimeWarner must be referring to one of their other negotiations, because300 percent is off by a large multiple."

Re: Time Warner's "Roll Over or Get Tough" campaign against Fox: "The roll over or get-tough campaign is like anIraqi election. Whatever way you vote, they're going toget tough."

Re: And in sum: "For months, we've been negotiating in goodfaith with Time Warner Cable. We think our position isreasonable. We're simply asking for fair compensation for the valueFox's programming offers. And we're going to continue to activelynegotiate with Time Warner Cable. However, viewers should have alternative plans in place."

Like that -- "alternate plans in place." You can almost picture the Death Star getting Alderaan into its sights.

And finally, the story that's actually described in the distant above headline, by Hollywood Reporter's Nellie Andreeva:

Fox will likely go dark in some 5.5 million Time Warner Cable homesat midnight Dec. 31, according to a memo to News Corp. employeessent Wednesday by the company's president, Chase Carey, who hasbeen leading the negotiations with TWC on behalf of Fox and severalentertainment and sports cable channels, including FX, Speed andFox Soccer.

Also on Wednesday, Fox got an indirect vote of support in itsbattle with TWC from its Hulu partner ABC, which indicated it couldbe next to enter the fray.

"At this time, it looks like we will not reach an agreement and ourchannels may very well go off the air in Time Warner Cable systemsat midnight tomorrow, Dec. 31," Carey wrote in the memo. "We deeplyregret that millions of Fox customers will be deprived of ourprogramming, but we need to receive fair compensation from TimeWarner Cable to go forward with them."

In total, almost 15 million TWC homes which subscribe to News.Corp.'s cable channels in discussion, will lose signal Thursdaynight.  

The memo was sent out hours after TWC chairman and CEO Glenn Britt sent a letter to Sen. JohnKerry, copying Carey, in which he agreed to submit the dispute tobinding arbitration before the FCC and proposed an interimagreement with Fox that would keep the network's signal on if adeal is not reached by the Dec. 31 deadline.

In his memo, Carey addressed the extension proposal.

"Some may ask why Fox isn't providing an extension whilenegotiations continue," he wrote. "The fact is that we've beentrying since the summer to negotiate a fair deal and that furtherextensions simply extend the period of time that Time Warnerprofits from our marquee programming without fairly compensatingFox for it."

In response, a TWC spokeswoman said that "negotiations are ongoing,but Fox's current demands are still excessive. We continue to hopeFox won't punish our customers by taking their programmingaway."

Carey encourages Fox viewrs in the affected markets  to switchto a satellite or a telephone provider.

"I can assure you that we have worked very hard over the past fewmonths to prevent this event," he wrote. "While we are continuingto engage with Time Warner Cable to try to resolve the issues, wewill not do a deal that does not value our programmingfairly."

Carey once again took aim at TWC's claim that Fox's demand, said tobe for $1 per subscriber per week, was unreasonable, reiteratingits arguments that "our requested compensation is about equal towhat Time Warner Cable pays TNT, a network with a fraction of theratings and original programming of Fox, or about a quarter of whatthey pay ESPN, a network we again dwarf in ratings." He pointed toTWC's "40% profit margin," arguing that Fox's content has been a"driving force" in their profit growth yet not being compensatedand that TWC's big profit margin would allow the company to pay thenetwork without raising rates.

Carey also touched on the future of the broadcast networks, whichhave been looking to retransmission consent fees as a way tosurvive amid falling ratings ad rates.

"Our broadcast business cannot continue to build on the success youhave achieved as an ad-supported-only network," he wrote.

Meanwhile, Disney -- whose ESPN commands the highest fee from cableproviders, $4 -- chimed in in the spat with a statement by aspokesman.

"The hit programming on the ABC TV Network in tandem with thepre-eminent local news and community affairs efforts of our tenlocal ABC stations has tremendous value and is worthy of faircompensation," the statement read. "Overall, cable operators payonly about 25 dollars a month for all of the programming on thebasic and expanded basic tiers, and they sell this to consumers forsome 60 to 70 dollars. Considering these numbers and the fact thatoperators use these video offerings to up sell even higher marginbroadband and phone services, blaming programmers for cable priceincreases is just plain wrong."

UPDATE: Some idiot congressman is urging both parties to agree to a 30-day "cooling off" period. That's just what everybody needs -- this spat to be dragged out longer. Also ignores the fact that Fox's programming in January is a key point of leverage. UPDATE: Time Warner agreed to cooling off period, but, as stated, this is part of Fox's leverage, so will be interesting to see if News Corp agrees.

Photo from Ars Technica