Policy

Fox Pulls Plug on Dish

10/04/2010 12:34 PM Eastern

Fox Networks pulled
the plug on a number of networks
last week, leaving 14.3
million Dish Network customers
in the middle of an increasingly
contentious carriage dispute
that could set the tone for
higher stakes retransmissionconsent
negotiations next
month.

The status of the negotiations
as of press time is in flux, and
a deal could be reached at any
moment.

Given Dish’s track record in
carriage disputes, that could
mean a deal could be reached in
a few days, a few weeks or never.

The deadline to reach a deal
for FX, National Geographic
Channel and 19 Fox Sports Net
regional sports channels came
and went at midnight (PT) on
Oct. 1. As both sides traded
barbs, Dish concentrated on
the exorbitant 50%-plus rate increases
it claims the broadcaster
is demanding (and which Fox
predictably denies), while News
Corp.-owned Fox focused on its
desire to be fairly compensated.

While neither side would give
specifics, SNL Kagan estimates
that FX receives average monthly
carriage fees per subscriber of
43 cents and Nat Geo of about
21 cents. Fees for the sports networks
range from 52 cents to
$2.88 per subscriber per month,
according to Kagan data.

“Dish Network is not going
to allow Fox or any programmer
to bully our customers into
paying such an unconscionable
price increase,” Dish senior vice
president of programming Dave
Shull said in a statement.

In the meantime, Dish said
it is making several channels
available to its customers at no
additional charge during the
dispute, including HD Net Movies,
HD Theater, NBA TV, NFL
Network, NHL Network, and
several other regional sports
networks.

Fox countered that it is only
asking for fair compensation
for its networks. And it warned
that Dish subscribers could face
the same problems with its Fox
broadcast and MyNetwork TV
stations come Nov. 1, when their
retransmission-consent deals
expire with the satellite giant.

“The proposal we’ve offered
Dish is fair and in line with the
tremendous value we provide,”
Fox said in a statement. “We regret
the inconvenience to our
viewers, but Dish has asserted
its subscribers do not value
our channels and has made a
decision to go forward without
them.”

Fox encouraged Dish customers
to vist its www.getwhatipaidfor.com website for
more information.

Among Fox’s recommendations
on the site is for Dish subscribers
to switch to DirecTV,
FiOS, AT&T U-Verse or their local
cable operator.

Fox and Dish both have a history
of tough negotiations over
carriage agreements. The programmer
had a high-profile retrans
battles with Time Warner
Cable in January and is currently
in negotiations with Cablevision
Systems.

Dish has not been afraid to
allow networks to fall off in past
negotiations — about 10 Viacom
cable networks, including MTV
and Nickelodeon, and 15 CBS
broadcast stations went dark for
two days on Dish in 2004; and
Lifetime channels met the same
fate for several weeks in 2006.
And the No. 2 satellite carrier
has never carried YES Network,
the regional sports channel carrying
New York Yankees baseball
games.

This year, Fuse network fell
from the satellite giant’s lineup
in July and HD feeds for Disney
Channel, Disney XD, ESPNews
and ABC Family all fell off in
June and remain so.

While Dish may seem to have
the upper hand in the current
carriage fight — the upcoming
Major League Baseball playoffs
will be on other channels — it
could be in for a battle come November.
By that time, Fox Broadcasting
stations will be well into
Major League Baseball’s World
Series (beginning Oct. 27) and
weekend airings of National
Football League games.

According to www.getwhatipaidfor.com, Dish customers
in 18 markets — including
New York, Los Angeles, Boston,
Chicago, Detroit and Philadelphia
— could lose access to Fox
owned-and-operated stations in
those areas. Fox said it continues
to negotiate with Dish and
is “working hard to reach an
agreement.”

In a separate dispute, MSG
Networks pulled its New York regional
sports channels MSG and
MSG Plus from Dish on Oct. 1, after
the two reached a stalemate
in negotiations. And though the
networks are different, the arguments
on both sides are the
same — Dish thinks it’s paying
too much and MSG thinks it isn’t
getting paid enough.