FNC, Cablevision in pact

First deal in channel's fee-hike plan

Fox News Channel has come to terms on a new carriage agreement with Cablevision Systems Corp., the companies said Monday.

The deal is the first realization of an extensive campaign by News Corp.'s 24-hour news network to achieve a significant license-fee hike. Fox News fell short of the $1 per subscriber per month figure it reportedly was seeking but nabbed about three times the 25 cents it had been receiving from most distributors, according to a report issued Monday by Merrill Lynch analyst Jessica Reif Cohen.

The report calculates that Fox News will receive 65 cents for the first two years of a six- or seven-year deal including escalating rates in the latter years.

The pact also eases a simmering standoff between the companies that was starting to spill over into the public. News Corp. had begun placing newspaper ads in Cablevision's tri-state footprint that Fox News could be removed when their deal ceased Oct. 7, and Rupert Murdoch had pressured Cablevision chairman Charles Dolan.

"We've enjoyed a good relationship with Cablevision and look forward to continuing our partnership," Fox News senior vp affiliate sales Tim Carry said.

Said a Cablevision spokesman, "We are happy with our new agreement with Fox News Channel."

The deal represents a big win for Fox News, which has long clamored to reap affiliate fees in excess of prime competitor CNN, which collects about 50 cents, though its ratings lag Fox News' in key demographics.

Still to come, however, are negotiations with bigger distributors including Comcast Corp. and EchoStar Communications. Reif Cohen believes that the Cablevision deal bodes well for reaching more agreements. "We view this as a strong positive for News Corp. in its future negotiations," she wrote.

Fox News Channel is distributed in 85 million homes.