Fox, Dish Reach Broad Station, Network Carriage Agreement

Deal comes after weeks of blocked sports, cable nets and ahead of key Sunday deadline

NEW YORK - News Corp./Fox and satellite TV giant Dish Network have struck a wide-ranging new carriage agreement that covers the former's Fox and MyNetwork TV stations, 19 regional sports networks and cable channels FX and National Geographic Channel.

The sports and cable networks were restored for Dish subscribers Friday after being blacked out since the start of the month due to a lack of agreement on new terms. A retransmission consent agreement for the TV station signals was set to expire at the end of the day Sunday.

The companies didn't disclose financial terms, but the deal, hammered out in marathon sessions this week, is understood to be multi-year. Analysts have estimated that Fox has been getting 50 cents-60 cents-plus per month per subscriber a year in retrans fees for its stations, with that price escalating to $1 or more after several years.

According to reports, the biggest dispute in the carriage negotiations was the price for the sports networks though. Sports programming is the most expensive in the industry and has regularly led to showdowns between network owners and distributors.

The language in statements from both companies signalled that they had reached a compromise that both can live with.

Analysts had said that both sides were vulnerable to a potential additional programming blackout. For example, Dish has also had other carriage disputes this year, and analysts have cautioned that an extended program loss could lead to painful subscriber losses.

Meanwhile, Fox would have suffered a loss of access to even more households amid a second major carriage dispute. After all, Dish has more than 14 million subscribers, with several millions in major markets getting Fox and MyNetwork stations.

Fox station signals have already been off in the 3 million Cablevision cable households for two weeks - with no end to that dispute in sight so far. However, a Fox spokesman said Friday the two companies have restarted talks. 

"After prolonged negotiations to reach a fair deal, we’re pleased to enter into a long term agreement with Fox and to assure our customers that they can continue to enjoy these channels," said senior vp of programming Dave Shull of Dish.

And Mike Hopkins, president, Fox Networks affiliate sales and marketing, lauded Dish for working "tirelessly," adding that the new agreement provides "a strategic partnership between Fox and Dish to bring the best programming to Dish subscribers."

FCC chairman Julius Genachowski also welcomed the news of the agreement. "I am pleased that Fox and Dish have kept in mind their responsibility to protect consumers from blackouts when they negotiate carriage terms," he said. "I urge Fox and Cablevision to complete their negotiations and end the impasse that has disrupted service to viewers."

Just following the unveiling of the Fox-Dish agreement, Senator John Kerry released a letter he received from Genachowski in support of his recent proposal to strengthen the FCC's power in retrans disputes.

"Under the present system, the FCC has very few tools with which to protect consumers' interests in the retransmission consent process," Genachowski wrote. "Such tools might include, for example, mandatory mediation and binding arbitration, which could prevent the kind of unfortunate stalemate that now exists between Cablevision and Fox."

Kerry said in a statement: "The FCC has said that reforms might include mandatory mediation and binding arbitration, but I believe less intrusive, more market-based options are the right answer."

Kerry's recent draft bill called for both a broadcaster and distributor to go through a process with the FCC to ensure good faith negotiations without broadcast signals being pulled in retrans fee negotiations. If both sides are found to have negotiated in good faith, but couldn’t reach agreement, the FCC could request binding arbitration under the proposal. If one party refuses, consumers would be informed about the difference in offers "so that consumers can judge for themselves who was making the fairest offer" before a loss of signal, Kerry said.

Kerry is expected to bring forward the draft bill during the lame duck session of Congress following next week's midterm elections.

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