News Corp.'s (NWS) Fox pulled its channels off Cablevision (CVC) early Saturday after the companies' programming deal expired and negotiations for a new one stalled, threatening broadcasts of baseball playoffs for some 3 million Cablevision subscribers in New York and Philadelphia.
The blackout affects Fox 5 and My9 in New York and Fox29 in Philadelphia. Subscribers also lose access to cable channels Fox Business Network, NatGeo Wild and Fox Deportes.
The channels went dark when the programming deal expired just after midnight Friday. Such deals spell out how much a cable TV system pays the broadcaster to carry its signals over the cable lineup.
The impasse means the subscribers, mostly in the New York area but also in Philadelphia, could lose access to Game 1 of Major League Baseball's National League Championship Series, when the Phillies take the field against the Giants on Saturday night.
Cablevision called on News Corp. to put Fox5 and My9 back on Cablevision immediately and submit to binding arbitration under a neutral third party.
"News Corp.'s decision to remove Fox programming from 3 million Cablevision households is a black eye for broadcast television in America," Cablevision spokesman Charles Schueler said.
Fox released a statement blaming Cablevision for the impasse.
"In an effort to avoid this very situation, we started this process in May and made numerous reasonable proposals to Cablevision," said Mike Hopkins, president of Fox Networks Affiliate Sales and Marketing. "However, we remain far apart and Cablevision has made it clear that they do not share our view regarding the value of Fox's networks."
Cablevision Blackouts Becoming Common
In separate fee disputes this year, Cablevision customers have experienced brief blackouts of Walt Disney's (DIS) ABC broadcast signal and Scripps Networks Interactive's (SNI) Food Network and HGTV. Subscribers missed the first 15 minutes of the Oscars in the ABC dispute.
Cablevision Systems has said News Corp.'s Fox is making "outrageous fee demands" for the right to carry the signals of the three cable channels and three TV stations.
Cablevision says it pays $70 million a year for access to 12 Fox channels, including those in dispute, and that News Corp. is now asking for more than $150 million a year for the same programming. It said Thursday that it is willing to submit to binding arbitration and called on Fox not to pull the plug.
Fox rejected the call for arbitration, saying the process would "reward Cablevision for refusing to negotiate fairly."
"Direct business-to-business negotiation is the only way to resolve this issue," it said in a statement.
While Fox didn't dispute Cablevision's claims, it called Cablevision "hypocritical" because it pays more for two of its sister company channels, MSG and MSG Plus, than it does for all 12 Fox channels. MSG and MSG Plus are owned by Madison Square Garden (MSG), which like Cablevision is controlled by the Dolan family.
Lawmakers Get Involved
Lawmakers have begun to speak up on the issue, including Rep. Steve Israel, D-N.Y., and Rep. Peter King, R-N.Y., who called for arbitration so viewers wouldn't have their TV programming disrupted.
Israel said in a statement Friday that he had asked the Federal Communications Commission to intervene in the dispute.
The FCC encouraged the two parties to agree to binding arbitration without suspending service and did not specify a mediator, according to Jack Pratt, a spokesman for the Long Island congressman.
Sen. Frank Lautenberg, D-N.J., had urged both sides to extend negotiations.
"New Jersey consumers do not deserve to be treated as pawns in this dispute," he said in a statement.
Rebecca Arbogast, a managing director at brokerage Stifel Nicolaus, said News Corp. and other broadcast company owners risk political intervention if they keep pushing carriage deals to the brink.
"The more that programming disputes escalate and signals get pulled ... the more pressure we believe there will be on the (Federal Communications Commission) and Congress to do something to prevent such consumer disruptions," she wrote in a research note Thursday.
In a separate dispute with satellite TV company Dish Network (DISH), Fox cut access on Oct. 1 to 19 regional sports networks, FX and the National Geographic Channel for some 14.3 million Dish subscribers. That fight foreshadows more tough negotiations, as the deal for Fox broadcast signals on Dish expires Oct. 31.