Hikes Coming for FX, Fox News

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Cable-operator affiliates of FX and Fox News Channel can look forward to hefty per-subscriber-fee increases when contract renewals come up in 2004 and 2006, respectively.

Fox Networks Group CEO Tony Vinciquerra, speaking at UBS Warburg LLC's annual Media Week conference in New York, said both channels will seek per-subscriber hikes in line with what its general-entertainment and all-news-network competition currently derive from operators.

FX's current per-subscriber charge is 30 cents, which will go up 1 cent next year, while Fox News -- now well ahead of rivals Cable News Network and MSNBC in primetime ratings -- charges 24 cents.

Per-subscriber fees will account for 65 percent of FX's 2002 revenue stream and 62 percent of Fox News' revenue stream, Vinciquerra noted.

For FX, Fox is shooting for between 45 cents and 60 cents per subscriber, per year, "similar to TNT [Turner Network Television] and USA [Network]." Fox News will push for a monthly 38-cents-per-subscriber rate to "match CNN's" fee, he said.

In sum, Fox's cable-network unit will deliver $107 million in earnings before interest, taxes, depreciation and amortization to parent News Corp.'s bottom line this year and finish 2003 with at least $243 million in EBITDA, Vinciquerra predicted. Revenue for 2002 will jump 28 percent from 2001, reaching $1.7 billion.

"Cable has the most exciting growth prospects for our entire entertainment division for the next five years," he said.

Vinciquerra had little news to offer about how Fox will deal with Cablevision Systems Corp. over its co-ownership of several Rainbow Sports regional channels, which is expected to reach a conclusion next week. Three options are in sight: keep the relationship as is, place a put on the deal or negotiate a settlement.

"We're talking about all of those options. There is a case to be made for leaving this the way it is," he said. "We're not sure where we want to go. You won't see anything happen until Dec. 17."

In other Fox Cable developments:

\u0007 National Geographic Channel will turn EBITDA-positive next year and break even in 2004, two years earlier than anticipated, Vinciquerra said.

\u0007 Live events will be incorporated into Speed Channel's format next year, lessening the network's dependence on news, profile and magazine series.

\u0007 FX will try to break its string of original late-night series flops (The Test, The X Show) next spring with a comedy/variety show starring Orlando Jones.

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