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Smith: Fox-to-Cable Highly Unlikely

News Corp. COO Carey Starts NAB Off with Bang 4/08/2013 3:09 PM Eastern

Gordon Smith, president and CEO of the NAB, was hardly ruffled by comments made by News Corp. president and COO Chase Carey about potentially taking Fox off the broadcast platform. The two shared a stage at the NAB Show in Las Vegas when Carey dropped that blockbuster after being asked about the live streaming service Aereo holding up in federal appeals court last month.

"I think those are what-if scenarios that we'll never see," said Smith.

Carey clearly planned to make a splashy announcement in Vegas. News Corp. issued a statement shortly after the executive stepped from the stage.

"We believe that Aereo is pirating our broadcast signal. We will continue to aggressively pursue our rights in the courts, as well as pursue all relevant political avenues, and we believe we will prevail," it read.

"That said, we won't just sit idle and allow our content to be actively stolen. It is clear that the broadcast business needs a dual revenue stream from both ad and subscription to be viable. We simply cannot provide the type of quality sports, news, and entertainment content that we do from an ad supported only business model. We have no choice but to develop business solutions that ensure we continue to remain in the driver's seat of our own destiny. One option could be converting the Fox broadcast network to a pay channel, which we would do in collaboration with both our content partners and affiliates."

Aereo hit back with its own missive: "Aereo has invented a simple, convenient way for consumers to utilize an antenna to access free-to-air broadcast television, bringing television access into the modern era for millions of consumers. It's disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television."

Carey also said he was "tremendously excited" about the direction Fox's broadcast business is heading. While addressing Carey on stage, Smith thanked him wholeheartedly for Fox's decision to rejoin NAB in recent years. Asked what he said to Carey after the two exited the ballroom stage, Smith responded: "I think you made some news today."

Carey's statements quickly became the story of the NAB show, his words parsed by broadcast vets in the various hotel bars up and down the Strip. Some believe it will expedite broadcasters' efforts to get mobile TV into a significant number of users' hands, making Aereo's offerings less attractive.

Smith said the broadcast colleagues he spoke to afterwards were, for the most part, not unnerved by Carey's revelation. "They were relieved he included them in the resolution, and that he's not trying to circumvent the affiliates," said Smith. "They like the idea that he put it out in public -- that we will fight this to the end. I sensed very little alarm."

LIN Media president and CEO Vincent Sadusky was hardly alarmed either after attending the opening session. "Taking his comments in their full context, I honestly believe Chase supports the broadcast infrastructure and sees retrans as a very valuable franchise," said Sadusky.

Other Fox affiliate holders may not be as calm, but many of the broadcast bigwigs in the room credited Carey for declaring war on Aereo, which does not pay the broadcasters for content. "We have to be aggressive in protecting our rights," said Jordan Wertlieb, executive VP and president at Hearst Television.

Bill Hoffman, whose Cox Media Group stations include Fox affiliate KUTV in the Bay Area, took Carey's declaration in stride.

"There are threats to the ecosystem. That is not something new in this digital era," he told B&C. "Their company is committed to surviving despite any major shifts that may occur. We respect that. I also heard a commitment to keep partnering with their affiliates to find how we stay strong together in what ever future comes to be."

Late Monday, Haim Saban, Chairman of Univision, said that his company may follow Carey's lead:

"Simply put, we believe that Aereo is pirating broadcasters' content.  As Chase Carey said, no broadcaster can afford to sit idly by and allow Aereo's theft to continue unchecked.  To serve our community, we need to protect our product and revenue streams and therefore we too are considering all of our options -- including converting to pay TV.  With Hispanics watching over-the-air news and entertainment at twice the rate of non-Hispanics, being forced to convert to cable would significantly impact this community."

September