Fox Is the Likely Winner in Time Warner Fee Settlement

News Corporation (NWS) and Time Warner Cable (TWX) reached an agreement over a fee dispute, which will allow the Fox broadcast networks to remain on the nation's second-largest cable system. The deal includes more than 13 million households and covers programming from Fox Television Stations, Fox Broadcasting, Fox Cable Networks and Fox's regional sports networks including things like football and American Idol.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Both sides characterized the deal as good for consumers, but terms of the deal were not disclosed. "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 COO, News Corporation.

Fox had been asking $1 for each Time Warner cable subscriber who has access to its programs. The industry standard is closer to a range of $.25 to $.50. Time Warner Cable said the it could not afford to pay the higher rate, or, at least that is what the company stated in public.

The negotiations were settled less that two days after the expiration of the previous agreement, which was ended at midnight as 2009 passed into 2010. Each company agreed to an extension beyond that deadline. Time Warner urged its customers to contact Fox and protest the potential interruption in their access to Fox programs.

The suddenness of the settlement probably means that Fox got the better of Time Warner Cable. Each company is large enough to handle the financial loss of a drawn-out period in which Time Warner customers had no access to Fox programming. But, the cable company would have faced the potential that large numbers of its subscribers would cancel their subscriptions and move to satellite TV or some other means of delivery.

Satellite companies like DirecTV (DTV) carry Fox programs. The Fox local stations are available on standard over-the-air broadcast signals. Fox programs are popular enough that many viewers would probably change services to have access to them.

The other reason to believe that Fox did better in the negotiations is that News Corp CEO Rupert Murdoch has made it clear that advertising-supported media are unlikely to be successful long-term. He claims that most of his company's websites will charge for content. That philosophy almost certainly extends to the other media that his company owns.

The Fox deal with Time Warner will be the new template for fees that networks charge cable companies for content, but the public may never know what the monetary aspects of those arrangements are. And, the public doesn't care. They just want to sit on their couches with a channel changer.
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