9:04am PT by Eriq Gardner
Fox News Resolves Legal Dispute Over Charter/Time Warner Cable Merger
Fox News and Charter Communications have agreed to end a contract spat that erupted after Charter acquired Time Warner Cable in May 2016.
Last year, the cable news network filed a lawsuit in New York state court that maintained its carriage agreement with TWC had terminated on the closing date of the merger between the two cable giants. According to the complaint, Charter attempted to use the Fox News/TWC agreement to pay lower license fees for the rebranded Spectrum service. Fox News insisted instead that the operative agreement was its direct deal with Charter. The lawsuit characterized Charter's alternative position — and the implied proposition that Charter had been acquired by TWC — to be a "ruse" and a "fraud."
In response, Charter argued that it is customary in the broadcast industry for a bigger operator with more customers to pay lower rates. Thus, the defendant wanted the contracts interpreted under the context that it had added subscribers when merging with Time Warner Cable. Charter also prepared counterclaims on how Fox News was in breach of contract by allegedly failing to honor "most favored nations" clauses.
On Wednesday, the parties stipulated to a dismissal of the lawsuit with prejudice. That typically means a settlement, although neither side has publicly announced the resolution. Fox News declined to comment on whether the dismissal of the case meant that Charter had come to a new or amended carriage deal.
Charter was sued on similar grounds by both Showtime Networks and Univision. Court papers indicate that the Showtime lawsuit was resolved in May, with the Univision case still pending. Charter and Univision are both set to file summary judgment papers by the end of the month after an escalation that at one point led the Spanish-language broadcaster to pull programming. A judge then granted Charter a restraining order before a temporary cease-fire was declared.