Fox Network Will Seek Higher Fees From Cable, Satellite

[bluepenguin]

The Fox Network will demand higher fees from cable, satellite and fiber systems over the next few years as current contracts begin to expire, said News Corp. (NWS: 14.52, 0.23, 1.61%) chief operating officer Chase Carey at an investor conference on Monday.

Carey said the network needs to exact higher fees in order to be able to compete with cable networks that earn revenue from affiliate fees and advertising, MarketWatch reported.

The News Corp. executive admitted there would probably be some public disagreement between the company and cable and satellite providers, but argued, “We think Fox is another channel and making the distinction between a broadcast and cable channel is a looking-backward definition and not a looking-forward definition," according to MarketWatch.

Carey noted popular programming such as “American Idol” and “24” is valuable content, and could be a possible impetus for the network to demand more per subscriber, comparable to the $4 per-subscriber fee ESPN currently assesses, according to the report.

News Corp. is the parent company of the FOX Business Network and FOXBusiness.com, and also owns MarketWatch.

Shares of News Corp. eased 0.3% on Monday to $14.52.

[bluepenguin]

Chase-careyx-large News Corp. COO Chase Carey says that he’s prepared to face bitter resistance from cable and satellite owners over Fox’s new demand that they pay a monthly fee to its TV stations and affiliates that carry the broadcast network.

“We need to have a business model that enables us to compete with the ESPNs, TNTs, and USA Networks,” Carey told Wall Street analysts Monday at the UBS Global Media and Communications Conference. “We’ll probably have some noise (from cable and satellite companies). But it’s important to us and we’re going to do it.”

All of the major networks are broadly hinting that they might yank television’s most popular shows from cable or satellite systems that don’t agree to pay about $1 a month for each subscriber.

Systems pay fees for cable channels, in some cases several dollars a month for each subscriber. But they usually don't pay for broadcast (over-the-air) channels, such as a Fox affiliate, that they carry. Instead, they compensate broadcasters by carrying and paying for a related cable channel, such as Fox News.

Carey disputes operators’ claim that they’d have to pass the new costs along to subscribers – potentially raising monthly bills by several dollars a month.

“They’ll panic,” he says. “At the end of the day, it’s not our issue. They’re big and profitable companies.”