In the first major deal to secure rate hikes from cable operators, Fox News Channel cut a carriage deal with Cablevision Systems that will nearly triple the network's license fee. Neither side would disclose the terms, but an industry source familiar with the negotiations says that the deal will pay Fox News an average of more than 75 cents monthly, up from roughly 25 cents the network has been fetching.
Fox News executives have spoken frequently about demanding $1 per sub, but even Chairman Roger Ailes has acknowledged publicly that was a negotiating stance and that he expected large operators to pay substantially less. Wall Street analysts have generally said they'll be excited if Fox News fetches more than 50 cents per sub.
In a statement, Tim Carry, Fox News' senior VP of affiliate sales, said, "We’ve enjoyed a good relationship with Cablevision and look forward to continuing our partnership." A Fox spokesman declined any further comment.
If the deals with other operators are anywhere close to as good, the series of renewals will create a substantial financial lift for Fox News. Even though Fox News' ratings are double CNN's , the No. 1 news network's revenues are substantially less because CNN has much better license fee deals rooted in the early 1980s.
Cablevision was one of the first operators to agree to launch Fox News 10 years ago, so was the first up for renewal. The negotiations were going badly, with even News Corp.'s Rupert Murdoch calling out Cablevision Systems Chairman Chuck Dolan in public last month about the risk of losing the channel.
The Cablevision deal sets the pace for negotiations with other operators. At three million subscribers, Cablevision is only the eighth-largest cable and satellite operator. However, because its systems are concentrated in the suburbs of New York City -- home to many ad agency executives -- Cablevision tends to get volume discounts similar to those of much larger operators. Still, negotiations with Comcast, Time Warner and EchoStar will likely be very difficult because all three have been as willing to fight for lower programming fees as Fox News is to increase them.
In a statement, Cablevision said, "We are happy with our new agreement with Fox News Channel."