Fox may shut out Time Warner
News Corp. says arbitration is not the right solution
LOS ANGELES - Bart Simpson and the Sugar Bowl game could disappear from the TVs of Time Warner Cable subscribers in New York, Los Angeles, and other markets in a bitter dispute over fees that the Fox television network is demanding.
With a deadline of midnight tonight approaching, Time Warner Cable offered an olive branch that could leave the Fox network and some of its cable TV channels on the lineup for millions of subscribers - for now. But an executive at Fox owner News Corp. indicated a signal interruption was probable.
In dispute are the fees that Time Warner Cable Inc. pays Fox to carry its channels. In the past, the Fox network was offered free, and cable companies essentially paid more for FX and other cable channels that News Corp. also owns. This time, News Corp. is demanding $1 per subscriber every month for the network itself.
Fox, hurt by reductions in advertising revenue and increases in programming costs, argues that Time Warner Cable is making money off its programming, so it should get a cut of revenue. Time Warner Cable says the demanded fees are excessive.
Time Warner Cable chief executive Glenn Britt said the cable TV operator will agree to binding arbitration and any interim steps necessary to keep Fox channels on while talks continue. “Consumers should not be held hostage during these negotiations. That’s just wrong,’’ Britt said.
But in a note to employees, News Corp. chief operating officer Chase Carey said temporarily extending the current terms past today would “simply extend the period of time that Time Warner profits from our marquee programming without fairly compensating Fox for it.’’
He also rejected arbitration as a possibility in a letter to Senator John Kerry, Democrat of Massachusetts, who had pleaded for both sides to agree to uninterrupted television for football fans “through the college bowl season.’’
Late yesterday, Kerry threatened to ask the Federal Communications Commission to intervene if the sides can’t agree in time.
If a new deal isn’t reached, programs that could disappear from Time Warner Cable’s lineup include “The Simpsons’’ and several football games - among them, the Sugar Bowl tomorrow, the Cotton Bowl on Saturday, and the NFL’s final regular season contests on Sunday. Bright House Networks’ cable TV systems also face a deadline today with News Corp.
In Florida, two television viewers filed a lawsuit yesterday against News Corp., seeking an injunction to ensure that the Fox broadcast of the Florida-Cincinnati Sugar Bowl contest would remain on Bright House’s cable system. A circuit judge in Orlando did not immediately rule.
Time Warner Cable has more than 13 million TV subscribers and Bright House has more than 2 million, though their dispute involving the Fox network only concerns 14 Fox-owned stations covering such markets as Los Angeles, New York, Dallas-Fort Worth, and Tampa Bay-St. Petersburg and Orlando, Fla.
Six other channels - including FX and Fox Sports en Espanol - and certain regional sports networks were also up for negotiations.