Fox News and Cablevision are headed for a showdown over the network’s campaign to secure substantial increases in its license fees to cable and satellite TV companies. The news network is taking a characteristic hardball approach to the negotiations, with News Corp. Chairman Rupert Murdoch personally calling out Chuck Dolan for a fight.
Fox News says it is looking to boost its license fees from around 30 cents per subscriber monthly to $1, arguing that if its audience is double that of rival news network CNN, its license fees should be as well. That’s a massive hike, especially at a time when operators are trying to clamp down on programming cost increases because they can’t readily raise basic cable rates.
Fox News went to war when it started the channel. Murdoch’s general aversion to government interference into the affairs of business didn’t stop him from enlisting the City of New York in a battle to secure carriage on Time Warner’s Manhattan system
“These are going to be very contentious negotiations; They’re gearing up for a possible battle,” says an executive with one cable operator.
Because Cablevision was one of the first operators to sign up for Fox News when it launched in 1996, the network is the first to be publicly targeted for attack. It started quietly last week when the network took out a legal notice in a Connecticut newspaper alerting Cablevision's customers there that they may lose Fox News when the operator’s deal expires Oct. 7. While cable systems are obligated to offer 30 days notice of a change in programming services, the network is simply trying to bring pressure on Cablevision.
Murdoch turned up the volume a bit by calling out Cablevision Chairman Chuck Dolan personally. Saying that Fox News hasn’t yet had “productive” negotiations with Cablevision, Murdoch said“Chuck Dolan has been a friend of mine for many, many years and I would hate that we had some big breach over this. But if we have to we will."
Murdoch warns that cable operators will face an onslaught from Fox News fans. “Our audience is passionate for Fox News. anyone who drops it off is going to be in mighty big trouble,” adding that "EchoStar and DirecTV are going to be right there picking over the bones.”