Fox News and Time Warner Do Business

The far-reaching distribution deal struck between Time Warner Cable and News Corp. late last year could pave the way for Fox News Channel to launch its much-talked about business service this year.

Along with renewing Fox News Channel, the affiliate accord with the nation's second-largest cable operator contains a “placeholder” provision for the cable news leader's proposed business channel. It also encompasses retransmission consent for Fox Broadcasting Co.-owned TV stations, a contract renewal for Speed Channel and the launch of Fox Reality on Time Warner systems.

Moreover, Multichannel News has learned that Fox News has reached an agreement with Charter Communications to carry the business service on a digital tier, should the channel launch.

A Time Warner executive with knowledge of the deal noted that agreement included a multiyear extension for Fox News and a commitment for the business channel. Another executive with knowledge of the deal placed the monthly per-subscriber fee for the proposed business network in the 10- to 15-cent range.

Officials at Time Warner and News Corp. declined comment. Charter representatives couldn't be reached by deadline.

A Fox News spokeswoman would only confirm the extension agreement for the news service and the placeholder pact for the business channel with Time Warner. She declined to comment on any financial terms.

Time Warner's large subscriber base — particularly its strong presence in Manhattan, home to the nation's financial district — has been viewed as critical to the official go-ahead for the business service, which has the support of News Corp. head Rupert Murdoch.

Fox News does not yet have a deal for the business service with Cablevision Systems, the other major cable operator in the New York DMA.

At the UBS Global Media & Communications conference in New York in December, News Corp. chief operating officer Peter Chernin reiterated that the company would not launch the business service until it has enough carriage. In the past, News Corp. said that meant about 30 million subscribers.

That's a total that now appears to be in Fox News's range, given the accords with Time Warner and Charter, plus earlier commitments from DirecTV and Comcast for the business channel. The placeholder accord struck with the nation's largest cable operator in November is said to encompass some 12 million Comcast subscribers.

In September, Fox News hired Alexis Glick, most recently a correspondent and co-host of the third hour of NBC's Today, as director of business news. Glick reports to Fox News vice president and managing editor of business news Neil Cavuto, who is expected to play a major role should the business service get on the air.

As for Fox News, Time Warner's original 10-year contract with the cable-news leader was set to expire in fall 2007, but the multiyear contract extension guarantees continued access to some 13 million subscribers.

An executive familiar with the negotiations called the terms similar to those Fox News reached with Cablevision last fall, in that there is an escalating license-fee structure. The agreement with Time Warner, this executive said, tops out in the 80-cent range in the latter years. The Fox News deals with Cablevision and Time Warner average around 75 cents per subscriber, per month, over the life of the contracts.

Fox News also inked renewal contracts with DirecTV and the National Cable Television Cooperative last year.

According to the Time Warner executive familiar with the deal, the affiliate contract, completed on Dec. 28, also encompasses retransmission-consent carriage for Fox's owned-and-operated stations through 2009.

Of the 35 stations in 26 markets comprising the Fox Television Station group, a number transmit in such Time Warner markets as New York; Los Angeles; Dallas; Austin, Texas; Cleveland; Milwaukee; Kansas City, Mo.; and Greensboro, N.C.

The Time Warner executive familiar with the pact said Fox's owned-and-operated stations had been out of contract with the operator since Dec. 1, 2004. The stations had remained on the air in the interim via month-to-month renewals under terms of the old contract, said sources with knowledge of the O&Os.

The far-reaching pact also covers a contract renewal for Speed, which counts some 69 million subscribers nationwide, as well as the launch of Fox Reality in roughly half of Time Warner Cable's footprint.

It is unclear when the Time Warner rollout will commence. The Time Warner launch, coupled with a recent agreement with Comcast, will push Fox Reality's subscriber count into the 35 million-home range.