Los Angeles-Fox Family Channel, looking for a relatively modest license-fee increase, has renewed its contract with Comcast Corp. and is close to deals with several other large MSOs.
In addition to Comcast, Fox Family is reportedly finalizing new affiliation agreements with Cablevision Systems Corp. and Charter Communications Inc. The programmer still needs to sew up deals with several other top 10 MSOs with contracts that expire at the end of the year, including Adelphia Communications Corp. and Cox Communications Inc., as well as the National Cable Television Cooperative, according to John Burns, Fox Family's president of distribution. Fox Family, a joint venture of Saban Entertainment and News Corp., has reached a new pact with Comcast that runs through 2007, Burns said.
"We're very pleased with where we are," Fox Family worldwide chairman Haim Saban said of the ongoing contract talks. "We're coming to terms we're comfortable with and terms that will allow us to continue our investment in the channel."
Saban, a savvy negotiator, has been able to marshal the support of some of the biggest CEOs in cable.
Steve Burke, CEO of Comcast Cable Communications Inc., confirmed that his MSO has renewed its pact with Fox Family. And Cablevision Systems Corp. has an agreement in principle.
"I anticipate we'll close our deal shortly," Cablevision president and CEO James Dolan said. "The deal is not yet inked yet, but I'm optimistic about it. Fox Family can count us as one of the affiliates in the house."
Apart from major MSOs, the network has 480 affiliation deals with small cable systems, TVRO companies and SMATV operators that also expire at the end of this year. So far, it has negotiated renewals on 80 percent of those arrangements, according to Burns. Fox Family, once the Rev. Pat Robertson-owned The Family Channel, relaunched with a new format two years ago after its acquisition by Saban and News Corp. It then suffered a steep ratings decline.
"You don't bet against Haim Saban and Fox," Burke said. "They will figure it out. They are committing the time and resources to figure it out."
The network reportedly wants rate increases of roughly 8 to 12 percent, which would take its monthly, per-subscriber license fee to 19 to 20 cents, according to industry sources. Burns wouldn't comment on what kind of rate increase Fox Family is seeking.
Some cable operators are balking at Fox Family's proposed rate increase. This week, for example, Fox Family is scheduled to be one of four programmers that will meet with the NCTC's board.
The co-op this year is requiring any network seeking a rate hike of 5 percent or more to appear before its board and justify the increase.
EchoStar Communications Corp. in September filed suit against Fox Family, saying it wanted to dump the channel. The DBS provider also complained it was paying $500,000 a month in license fees.
EchoStar chairman Charlie Ergen has griped that because Fox Family's ratings have dropped dramatically since its relaunch, he should be paying less for the service.
Others like the changes they see at Fox Family, and think it fills an important niche for family-friendly programming.
Charter CEO Jerald Kent said his MSO is "basically done" crafting a contract renewal with Fox Family.
"I watch it," he said. "Fox Family is a good network. In this age when politicians are harping on Hollywood, and people are concerned about nudity and violence, Fox Family fits the bill of wholesome family entertainment. And Fox Family has invested some time and money to build the brand."
In Charter's customer research, subscribers said family programming is one of the "most highly valued genres in the industry," Kent added.
Fox Family's renewal talks with Adelphia are rather complex, since they tie into the MSO's plans to use digital compression to temporarily expand the program lineups at its non-rebuilt systems, which represent 800,000 to 1 million subscribers.
Adelphia is asking a handful of programmers, including Fox Family and American Movie Classics, to move from analog to digital slots to make room for compressed services. That would allow Adelphia to quickly boost the channel lineups on its smaller systems, making them competitive with direct-broadcast satellite until they are rebuilt.
Fox Family, which reaches 76 million subscribers, is trying to work with Adelphia and may agree to the MSO's upgrade plan in exchange for a renewal.
Fox Family, which can't employ retransmission consent as a bargaining chip, is trying to achieve "parity" with different cable operators across its rate card, according to Burns.
For example, some of Fox Family's affiliation deals are 10 years old, with very low license fees. Others are only two or three years old, with higher rates. Some of the deals include volume discounts.
"Our strategy is to get rate parity pretty well flat across the industry, instead of multi-discounting," Burns said. "We're trying to get everything flat as we can and increase our rates as well. So it will be the same rate card, but it will impact MSOs differently."
Fox Family has brought on a new executive team that's trying to position the service as a network for kids and tweens during the day, and adults 35 to 49 at night. Some of the programming has garnered better ratings numbers.
For example, Fox Family's "13 Days of Halloween" stunt this year was up 20 percent in households compared with last year, according to the network.
Scariest Places on Earth
specials delivered a 1.7 household rating for the week, outperforming TBS Superstation, USA Network, FX and TNN: The National Network in their time slot.
In October, Fox Family was up 33 percent in total day from a year ago, to a 0.4 from a 0.3, according to Nielsen Media Research. But in primetime, the network was down 30 percent, to a 0.7 from a 1.0.
Last week, Fox Family said it would develop a made-for-TV movie based on the authorized story of controversial coach Richard Williams and his daughters, the tennis champions Venus and Serena Williams.
Recently, Fox Family even claimed in a lawsuit that one of its programming ideas was so good, CBS copied it. Charging that "piracy is not flattery at all," late last month Fox Family filed a copyright infringement suit against the broadcast network, alleging it stole the idea for a reality-based game show called
Race Around the World.
CBS denied the charges. "Our show was developed independently and prior to the Fox Family show and we will prove that in court," a CBS spokesman said.
The suit, filed in U.S. District Court in Los Angeles, says that in 1998-long before
was a big hit on CBS-Fox Family's programming team began developing a reality show in which families would race around the globe in a competition ending in New York City.
The suit alleges that this year, just 62 days after Fox Family announced its plans to debut
Race Around the World
in 2001, CBS unveiled "a virtual clone of Fox Family's
Race Around the World."
The suit said: "In an act of supreme arrogance, CBS did not even bother to change the name of its copycat program."
On June 28 this year Eytan Keller, Fox Family's executive vice president of reality programming and specials, met with a potential sponsor for its
Race Around the World, Richard Bangs of Expedia, and his agent, Alix Hartley of Creative Artists Agency.
Hartley recommended that another one of her clients, Bertram Van Munster, act as producer for
On July 10, Fox Family publicly announced its plans for the show. Then, on July 19, published reports said Van Munster was pitching a show called
Around the World in 80 Days
to TV networks. In September, CBS said it would take the show, now called
Race Around the World.