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News Corp. reaches deal to keep Fox channels on DirecTV

Satellite broadcaster DirecTV had been set to drop more than two dozen News Corp.-owned Fox cable networks because of a feud over a new contract.

November 01, 2011|By Joe Flint, Los Angeles Times

News Corp. has struck a new deal to that will keep its powerful cable and broadcast channels on satellite broadcaster DirecTV.

The two sides had been feuding over a new contract, and DirecTV, which has more than 19 million subscribers, was set to drop more than two dozen News Corp.-owned Fox cable networks Tuesday. Channels that are part of the agreement include the popular FX network and Los Angeles regional sports outlets Prime Ticket and Fox Sports West.

Monday's accord not only consists of Fox's cable channels but also the local television stations that carry the programming of the Fox Broadcasting Co., including National Football League games and the popular comedies "Glee" and "New Girl."

Although the contracts for Fox's local TV stations were not to expire until the end of the year, DirecTV did not want to keep negotiating new pacts with News Corp. and was pushing for an all-encompassing deal, people close to the talks said. The Fox News channel is also part of the new agreement even though that contract isn't set to expire until early 2012.

Terms of the deal weren't disclosed. DirecTV had complained that Fox was seeking an increase of 40%, but Fox called that figure ridiculous. Cable networks and broadcast channels are typically sold on a per-subscriber basis. According to SNL Kagan, FX currently gets about 40 cents per subscriber a month. Fox Sports West gets almost $2.70 per subscriber a month. Sports channels are usually more expensive because of their rights fee expenses.

The agreement ends several weeks of acrimony between the two companies. Fox took out advertisements suggesting that consumers drop DirecTV for other distributors, and Kurt Sutter, executive producer of FX's motorcycle gang drama "Sons of Anarchy," took to Twitter to blast DirecTV executives.

DirecTV fired back by sending a letter to the Federal Communications Commission that accused Fox of a misleading ad campaign and even suggested that the Rupert Murdoch-owned company's conduct "is certainly not what the commission had in mind when it made Fox a steward of the nation's airwaves entrusted to serve the public interest."

Squabbles between programmers and distributors are becoming more common. Networks look to distribution fees to cover rising programming costs. At the same, distributors fear losing customers to rising monthly bills.

Channels rarely get dropped, but it does happen. Last year, satellite broadcaster Dish Network stopped carrying many Fox-owned cable networks for a month until a new deal was reached.

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