With the expiry of the earlier contract at midnight Dec 31, Time Warner Cable Inc. (TWC) forged a new programming deal with News Corp. (NWSA) to continue broadcasting hit programs from the Fox Broadcast Network, ending a series of public spat that threatened to deny customers of their favorite TV shows.
Although the terms of the deal were not divulged by the companies, both agreed that a fair agreement was reached to avoid any disruption in programming. The deal benefited over 13 million households with uninterrupted programs from Fox Television Stations, Fox Broadcasting, Fox Cable Networks and Fox’s regional sports networks, and also included carriage agreements for Bright House Networks’ 2 million additional subscribers.
Both Time Warner Cable and Fox had much at stake if a timely solution was not worked out. If the programs went off the air, customers could have switched to competitors such as DIRECTV Group, Inc. (DTV) or AT&T, Inc. (T) U-verse that carry Fox programming, resulting in a loss of revenue for Time Warner Cable. On the other hand, Fox would have lost viewers and advertising dollars for some very popular shows, such as the 20th anniversary special of “The Simpsons” on Jan 10, and the season premieres of “American Idol” on Jan 12 and “24” on Jan 17.
The dispute had earlier stemmed from the disagreement on subscriber fees on Fox’s free-to-air broadcast network. While Fox had demanded $1 per subscriber for the retransmission rights, Time Warner Cable had then agreed to pay only in the range of 25 cents to 50 cents. The negotiations continued for months as none of the warring parties agreed to concede.
Read the full analyst report on “TWC”
Read the full analyst report on “NWSA”
Read the full analyst report on “DTV”
Read the full analyst report on “T”
Zacks Investment Research
