FX, Regional Nets Get Time Warner Deal

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Los Angeles -- In a deal that also packages in the Fox
regional sports networks, Time Warner Cable has agreed to roll out FX to 80 percent of its
homes -- an additional 7 million subscribers that will include a launch in New York City
-- officials said last week.

"Time Warner takes us to the next level," FX
Networks president Peter Liguori said during a press conference at the Western Show here.

Time Warner currently carries FX in 3 million of its 12.5
million homes, mainly on cable systems that the MSO had acquired, according to FX
officials.

With the current deal, over the next two years, Time Warner
will launch FX in 7 million more homes on expanded basic. Most of the rollouts will take
place next year, although the New York launch probably won't happen until the second year.

Part and parcel with signing a long-term affiliation
agreement for FX, Time Warner has also entered a 10-year deal for the Fox regional sports
networks.

Lindsay Gardner, executive vice president of affiliate
sales and distribution for Fox Channels Group, said Time Warner will see license-fee
increases for the regional sports networks, but the MSO will enjoy
"predictability" in that pricing over the long term of the deal.

In that way, this agreement is similar to a carriage
agreement FX closed earlier this year with AT&T Broadband & Internet Services,
which included the Fox regional sports services and FX carriage.

So with sports-programming costs skyrocketing, Time Warner
will have its increases for the Fox regional sports networks locked in, without the threat
of a sudden escalation of their price over the long haul.

Gardner said Time Warner "for the most part was out of
contract" with the Fox regional sports networks. He also claimed that FX's
affiliation deal with Time Warner was unusual in terms of an MSO "adding this many to
expanded basic over such a compressed period of time."

FX's distribution is now 45 million subscribers, but it has
commitments for 55 million. FX -- which launched by exchanging retransmission consent for
Fox TV stations for carriage -- is a pricey network, which had made some MSOs balk at
carrying it. Its license fee is reportedly 28 cents per month, per subscriber in its
recent deals.

Apart from getting a long-term pact for the regional sports
networks, Liguori maintained that Time Warner appreciates FX's investment in programming,
from originals to the National Association for Stock Car Auto Racing to off-network series
such as The Practice and Ally McBeal.

He mentioned that FX -- which has a deal with Major League
Baseball that extends to next year -- is weighing whether to move its baseball games from
Saturday to another night.

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