Even though it didn't have retransmission consent as a
bargaining chip this go-around, FX has renewed carriage deals with MSOs representing about
85 percent of its subscriber base, or 35 million homes, officials said last week.
So far, FX has negotiated long-term renewals with cable
operators including Cable One, Cablevision Systems Corp., Century Communications Corp.,
Cox Communications Inc., InterMedia Partners, The Lenfest Group, Multimedia Cablevision
Inc., the National Cable Television Cooperative and TCA Cable TV Inc.
Last year, big operators Tele-Communications Inc. (now
AT&T Broadband & Internet Services) and MediaOne Group Inc. renewed their FX
agreements.
"The MSOs we are working with recognize the value of
FX in terms of programming and marketing," FX president Peter Liguori said.
FX's charter five-year affiliation deals expire June 1. The
network launched on that date in 1994 with 18 million subscribers -- one of the biggest
launches in recent history.
It was able to rally so many homes in large part because in
exchange for carrying FX, operators obtained retransmission consent to carry Fox-owned or
affiliated TV stations. In addition, MSOs agreed to pay about 25 cents per month, per
subscriber, in license fees for FX.
But FX couldn't offer retransmission consent as a deal
point for its contract renewals. That's because this spring, Fox Television chairman Chase
Carey told Fox affiliates they would be on their own in terms of doing
retransmission-consent deals with cable operators in exchange for carriage.
"The last time around, we assumed your proxy and
negotiated on your behalf," Carey told his station affiliates. "In today's
environment, we believe it is best for each of you to negotiate your
retransmission-consent renewals based on the individual factors affecting your specific
market Therefore, I want to confirm that we will not assume your proxy this time.
We will instead work with you individually to determine a plan for dealing with
retransmission consent in both the short and long term."
Initially, MSOs were griping that FX should cut its license
fee dramatically since retransmission consent was no longer part of the network's package.
But despite those grumblings, FX managed to get most of its cable affiliates back on board
for renewals.
"We secured these renewals focusing solely on the
value of FX overall," said Lindsay Gardner, FX's executive vice president of
affiliate sales and distribution.
FX didn't cut its rate card on the new contract. It has
imposed a modest license-fee increase -- comparable to the rise in the Consumer Price
Index -- that takes its fee to about 28 cents per month, per subscriber, up from 25 cents
or so, according to cable-operator sources.
"The network is competitively priced," Gardner
said.
Instead of retransmission consent, FX in some cases is
getting operators a break in license fees for Fox Sports Net's regional sports services in
exchange for renewal of its own carriage deals, sources said.
FX and Fox Sports Net are part of Fox/Liberty Networks, and
News Corp. is in the process of buying out Liberty Media Group's stake in Fox/Liberty.
Fox's game plan for retransmission consent remains a
mystery to MSOs.
A number of cable operators have received letters from Fox
TV stations during the past month that extend retransmission consent -- which was set to
expire June 1, when the FX deals were up -- until the end of the year.
But the stations haven't told operators what they will be
looking for in exchange for retransmission consent at year's end, when the extensions are
up.
Now, some operators are speculating that the Fox stations
are waiting to possibly trade retransmission consent for carriage of broadcast-digital
channels or of one of Fox's other cable properties.
For example, Fox has joined NBC as a partner in National
Geographic Channel. Perhaps Fox will try to get MSOs to carry NGC in exchange for
retransmission consent.
FX has substantially boosted its amount of original
programming, doubling its investment from last year, Liguori said.
This summer, it will air the Toughman boxing competition on
Fridays, as well as debuting The X Show, a daily late-night talk show, which
premieres June 2.
FX also acquired some high-profile off-network series, such
as NYPD Blue and The X-Files,and it airs some marquee sports
programs.
Cable One, which just renewed with FX, hadn't carried the
service MSO-wide, according to vice president of strategic planning Jerry McKenna. But as
part of its renewal, Cable One will give FX wider carriage "in multichannel deals
that involved going-forward rates" for Fox regional sports networks, McKenna said.
As for the FX renewal, McKenna said, "We felt it was a
fair deal, not a great deal."
Cable One is in the process of picking and negotiating
contracts with 37 cable networks that it plans to carry on all of its systems. Deals have
now been done with about 29 of them, including FX.
While the NCTC renewed its FX deal, the co-op's members
must also renew their deals with the network individually, NCTC senior vice president of
programming Frank Hughes said.
One of the holdouts that hasn't yet renewed its FX deal is
giant Time Warner Cable.
