Large Rate Hikes by Fox News, USA


Fox News Channel, by its own account, is fair, balanced and, now, expensive.

The home of Bill O’Reilly and the “No Spin Zone” is about to quadruple the fee it charges cable and satellite distributors when it begins negotiating new carriage deals next year, according to News Corp. officials.

The top-rated news channel will seek payment of $1 per month, per subscriber from cable and direct-broadcast satellite operators that want to carry it, according to a News Corp. executive on the condition of anonymity. That compares with the 25-cent fee Fox News currently receives from most distributors.

If it holds the line on that charge, Fox News very likely would also become the most costly channel to distribute. By comparison, its chief rival, Cable News Network, charges 60 cents per subscriber, per month for carriage.

But News Corp. chairman Rupert Murdoch probably sees $1 as cheap compared with CNN’s rate. In an August meeting with Wall Street analysts, he noted that Fox News “now has more than doubled the audience of CNN.”

Fox News is not the only channel getting aggressive on rates. USA Network last week wrung 80 cents per subscriber, per month out of a new deal struck with Time Warner Cable through its parent, NBC Universal. That marked a 60% increase from its old rate of 50 cents, according to an NBC Universal Cable executive, who also discussed rates on condition of not being personally identified.

NBC Universal Cable president David Zaslav would not confirm USA’s new rate card, but he said the network has improved its value through original content such as The 4400 and Monk, as well as plans to bring back World Wrestling Entertainment Inc. content.

Fox News would not be the most costly network. The new rate puts the “characters” network -- home to such outsized personalities as O’Reilly, Sean Hannity and Neil Cavuto -- still well behind ESPN, which gets $2.60 per subscriber, per month.

Cable operators -- already losing subscribers to DBS operators such as DirecTV Inc. and EchoStar Communications Corp. and facing potential losses long-term to new entrants from the telecommunications business, including phone giants Verizon Communications Inc. and SBC Communications Inc. -- are likely not to want to drop Fox News, even at four times the price.

Fox News executives declined comment, as did executives at MSOs including Charter Communications Inc., Comcast Corp., Time Warner, Bresnan Communications, Cox Communications Inc. and Insight Communications Co. Inc.

For more on the rate hikes by Fox News and USA, please see R. Thomas Umstead’s story on page six of Monday’s issue of Multichannel News.