January 2, 2010 in Business

Fox reaches cable deal

Contract with Time Warner had expired Thursday night
Ryan Nakashima Associated Press
 

LOS ANGELES – The Fox television network and Time Warner Cable on Friday announced an agreement in principle on a television programming deal that allows signals to continue for millions of cable subscribers.

Fox had threatened to force Time Warner Cable and Bright House Networks to drop the Fox broadcast signal from 14 of its TV stations and half a dozen of its cable channels as a contract expired at midnight Thursday.

But signals were extended into Friday as talks continued, allowing more than 6 million cable subscribers in New York, Los Angeles, Orlando, Fla., and other markets to watch college football bowl games and other programming.

A statement from Fox and Time Warner Cable said the deal includes Bright House.

“We’re pleased that, after months of negotiations, we were able to reach a fair agreement with Time Warner Cable – one that recognizes the value of our programming,” said Chase Carey, deputy chairman at News Corp., which owns Fox.

The negotiations had left some football fans wondering whether they would have access to the Sugar Bowl game, a matchup between highly ranked Florida and Cincinnati.

The statement did not give details on the agreement.

Fox has said it wants to be paid $1 per cable subscriber each month for the broadcast signal it now gives away freely from the stations it owns. Other Fox affiliate stations that are owned by different companies have already cut deals to be paid by cable operators for a fraction of that fee.

Fox had said it can no longer give away its stations’ signals because the network is facing stiff competition from cable channels, such as the Walt Disney Co.’s ESPN, which earn subscriber fees on top of advertising dollars.

That dual revenue stream allowed ESPN to outbid Fox for high-priced events such as the college football Bowl Championship Series – including the Sugar Bowl, Fiesta Bowl and Orange Bowl that are now on Fox – from 2011 to 2013.

Time Warner Cable, in the meantime, had vowed to hold the line on cable bill increases, and said the vast of majority of viewers who went to its Web site, www.rolloverorgettough.com, urged it to “get tough” and fight back against higher costs.

Neither side would have fared well if signals had been pulled.

Fox would have lost viewers and advertising dollars for some highly anticipated shows this month, including the 20th anniversary special of “The Simpsons” on Jan. 10, and the season premieres of “American Idol” on Jan. 12 and “24” on Jan. 17.

If the signal had been dropped, cable operators could anger customers, who can switch to competitive television providers such as DirecTV or AT&T’s U-verse that carry Fox programming.

© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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