Cable operator Time Warner Cable Inc. (TWC) and the Fox Networks Group, an operating unit of News Corp. (NWS, NWSA), Friday said that they have agreed in principle to a comprehensive distribution agreement, which will allow 13 million households to continue to access programs from Fox Networks. The companies did not reveal the terms of the deal.
Fox Networks will offer programs from Fox Television Stations, Fox Broadcasting, or FOX, Fox Cable Networks and Fox's regional sports networks. The agreement also includes carriage agreements for Bright House Networks' 2 million additional subscribers.
News Corp. was seeking increased cash fees for Fox Networks, and talks were ongoing for the past nine months without reaching any agreement. Fox reportedly asked for fees of $1 per subscriber per month to carry its networks, which include free-to-air shows such as "House" and "American Idol," and also sports programs like NFL.
Meanwhile, Time Warner Cable, the second-largest cable operator in the U.S., said that media companies are making unfairly high price demands to renew the contract especially during a recession which would only hurt consumers. The company also said that it has offered Fox a reasonable price increase.
Time Warner made an announcement just after 12:01 AM on New Year's Day that it received brief extensions of carriage contracts from Fox Networks, as well as from the Food Network and Great American Country of Scripps Networks Interactive (SNI). The cable provider then added that fee-related negotiations were continuing.
Commenting on the distribution deal, Glenn Britt, Chairman, President and Chief Executive officer, Time Warner Cable, stated, "We're happy to have reached a reasonable deal with no disruption in programming for our customers."
"We're pleased that, after months of negotiations, we were able to reach a fair agreement with Time Warner Cable -- one that recognizes the value of our programming," said Chase Carey, Deputy Chairman, President and Chief Operating Officer, News Corp.
On November 25, Time Warner Cable had launched its "Roll Over or Get Tough" campaign to get customer feedback on rising programming costs. On Thursday, the company said that it received over one million visits to its campaign website with more than 90% supporting "Time Warner Cable to 'Get Tough' with Fox's unreasonable demands."
In a similar issue, Scripps Networks has said that two of its top-rated television networks, Food Network and HGTV, went off air on Cablevision Systems Corp. (CVC) in New York City, Long Island and the Tri-State Region at midnight New Year's Eve after the cable operator failed to negotiate acceptable rates for programming distribution rights.
John Lansing, executive vice president of Scripps Networks Interactive, said, "The rates we are seeking represent a very modest increase when you consider that Food Network and HGTV are among the top networks in all of cable."
TWC closed Thursday's regular trading session at $41.39 on the NYSE, down $0.44, on 1.33 million shares. In the past 52-week period, shares have been trading in a range of $20.19 to $68.22 per share.
NWS dropped $0.19 and closed Thursday's trading at $15.92 on the Nasdaq, on a volume of 1 million shares.
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