News Corp. is looking to increase subscriber fees
for Fox News Channel in a new round of negotiations with distributors.
Chase Carey, COO of News Corp., speaking at the
38th Annual UBS Global Media and Communications Conference Wednesday, said Fox
News gets only a small fraction of what ESPN gets.
"That channel in the cable world is right there
with ESPN, as important a channel as exists out there," he said. "Clearly a lot
of customers [would] move if it weren't there."
ESPN is the highest priced national cable channel
at about $4 per subscriber per month. After its launch deals began expiring in
2006, Fox News, which has grown into the top-rated cable news channel, was able
to increase its rate to about $1. Now some of those deals are expiring, opening
the door to a new round of negotiations.
Carey said that other News Corp. cable channels
also have opportunities to increase their sub fees, especially when compared to
their more established competitors.
"Our channels are pretty new compared to a lot of
their peers," he said, comparing National Geographic Channel to Discovery and
FX to TNT and USA "If we make every channel a leader in its category,
we've got a lot of room to grow."
News Corp. has also been seeking increased fees for
retransmission of its Fox broadcast channel. Those efforts have largely been
successful so far, Carey said.
Carey declined to disclose the terms of deals closed
recently with Cablevision Systems and Time Warner Cable, which became very
public as deadlines came and went. But he did say "we were looking to what we
thought was fair and we stuck to our guns. It takes two to make a deal... we
achieved what we set out to achieve."
Unlike CBS, which recently struck a long-term deal
with Comcast, Carey said News Corp. prefers shorter deals with distributors.
"We're still not getting anything close to
competitive values," he said, comparing Fox with the fees reaped by some cable
channels.
But the money Fox is getting from retrans payments has
changed its financial picture.
"It's our most important network" in terms of
content development, he said. "We need a healthy business as a foundation to do
that" and retrans "put us on that track."
He added that Fox "should be our most important
channel. It should be our most profitable channel. That's what we're looking to
achieve."
Carey said that Fox believes it has pumped new life
into its most important program, American
Idol.
"It's a dominant franchise. We can take advantage
of a new, fresh and different panel [of judges]" he said.
That panel won't include Simon Cowell, but Cowell
will be bringing his new show, X Factor,
to Fox next season.
"We will have year-round franchises with Idol and X Factor in the
fall with Simon," he said.
