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Fox Threatening to Dump Some Local Affiliates

M

MattParker

Fox wants affiliates to cough up a program fee to the network, Bloomberg News reports. Fox says if any affiliated stations don't agree to the fee and pay it, Fox may look for another affiliate in the market ("pursue different distribution channels to receive fair value for our programming").

The bone of contention: Many Fox affiliates get retransmission fees from cable and satellite providers. Fox wants a piece of the action. Fox's COO says the network's total cut would be in the "hundreds of millions of dollars." The chair of Fox's affiliate board says Fox (News Corp) has already targeted affiliates to use as an example to get the rest in line.

http://www.bloomberg.com/news/2011-02-09/news-corp-s-fox-says-it-may-drop-affiliate-stations-without-program-fee.html

Look for another round of TV musical chairs in some markets with independent (non O&O) affiliates. CW and My TV stations would probably be happy to pay the Fox fees. Maybe even some Comcast-Sheinhardt Wig Company-Universal-NBC affiliates.
 
The end result will be that cable and satelite subscribers will pay even more in retransmission fees to local Fox stations.
 
I don't see a lot of stations not paying. They'll simply get more from the cable companies and cable will pass that cost onto the customer.

There may be a fewer smaller markets where this won't work or maybe if FOX is on a subchannel (are there any markets like this).

It'll be interesting to see if the other major networks follow

Doesn't the CW charge reverse compensation already? If so, they seem to do OK with it.
 
The problem is that Fox wants it both ways. They're trying to squeeze the money out of their affiliates, but when the affiliates try to pull programming to help negotiations along, Fox does an end-run around them, thus weakening their position.

I think that if the affiliates didn't feel like Fox was purposely trying to injure their negotiating position and instead was helping them acquire higher retrans payments, they wouldn't be so resistant.

Note that I'm not commenting on whether this situation or retrans in general are right or wrong, just commenting on the overall situation.

- Trip
 
Where is Fox rated these days in the grand scheme of things? From the outside it seems they must be one of the leading networks. They've really made a place for themselves and a lot of affiliates are in a much better place than they were 10 years ago because of it. I can't say I totally disagree with this.
 
wouldn't it have made more sense for them to do this BEFORE the Super Bowl?
 
My thinking here is that they're not happy with some of the station groups (Sinclair) who aren't doing much to serve the viewers. For example, WUTV dropped the news programs a few years ago. They used to be a famous station when they were independent. Fox could make a deal with LIN TV to put the affiliation towards either a subchannel of WIVB or replace The CW at WNLO. However, that's just my speculation.
 
stationless listener said:
My thinking here is that they're not happy with some of the station groups (Sinclair) who aren't doing much to serve the viewers. For example, WUTV dropped the news programs a few years ago. They used to be a famous station when they were independent. Fox could make a deal with LIN TV to put the affiliation towards either a subchannel of WIVB or replace The CW at WNLO. However, that's just my speculation.
Click to expand...

I doubt that, personally. I think what this equates to is broadcast revenue being down while cable revenue is up. They see this as unfair, because cable has an unfair advantage in that it can ask for subscriber fees. What Fox is doing is just saying "fine, we agree that you should demand these retransmission fees, but the only reason you can get them is because of us, so we want a cut".

The earlier poster was right though. All it means are higher cable fees for those of us who still subscribe. Whoever sold the American people down the river on retransmission consent should be immediately ejected from DC. I understand that it puts them at an "unfair advantage" but cable tv networks have an unfair advantage too, being that you have to pay to see them.
 
Is WXXA in Albany, NY safe? They've been FOX for 25 years now, and I'm wondering if they're on the chopping block... then again, if they do get dumped by FOX, wonder if we'll see FOX on a subchannel of WTEN or WNYT in Albany :)
 
Is Fox 61 WTIC Hartford CT safe?I'm not reilly a big fan of their Network programming since Melrose Place, but I would be a big problem it it gets dropped.
 
landtuna said:
Another good reason to dump cable.
Click to expand...

Problem is, if FOX kills the affiliation agreement with stations in certain markets, and can't find other broadcast affiliates willing to pay them, then they could move to a cable-only distribution model in those markets. Then the viewers who dumped cable will lose out on FOX.
 
M.J. said:
landtuna said:
Another good reason to dump cable.
Click to expand...

Problem is, if FOX kills the affiliation agreement with stations in certain markets, and can't find other broadcast affiliates willing to pay them, then they could move to a cable-only distribution model in those markets. Then the viewers who dumped cable will lose out on FOX.
Click to expand...

You don't think they'd have everything set up before pulling the plug on their current affiliate? I think Fox is pretty dumb but not that dumb.

Personally I wouldn't miss Fox at all. I watch only one program and that one is local.
 
Always FOX in the news. Just last fall FOX pulled FOX 5 and WWOR off Cablevision because new deals weren't made. Only thing that made FOX stand out was back in 1992 when they made a bid at the NFL. Would FOX be big today if they didn't get that deal?
 
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