Fox rejects Cablevision offer

Updated: October 27, 2010, 10:38 PM ET
Associated Press

LOS ANGELES -- Fox on Wednesday rejected a last-ditch offer from Cablevision Systems Corp. to pay it more for its TV stations' signals, a move that could leave some 3 million Cablevision subscribers in the New York area with few options besides heading to a bar to watch baseball's World Series on TV.

In preparation for an extended blackout, Cablevision e-mailed its customers Wednesday saying it will reimburse them $10 to cover the cost of paying to watch the games online through MLB.com.

Cablevision said earlier in the day that it offered to pay the same rate as Time Warner Cable Inc. for signals from Fox 5 in New York and Fox 29 in Philadelphia for one year, even though the rate is more than it pays for any other New York broadcast station.

The cable operator did not explain what it was offering for My 9 in New York and cable channels Fox Business Network, NatGeo Wild and Fox Deportes, which are also part of the fee dispute.

Fox, a unit of News Corp., said the rate was meant as a package deal, and called Cablevision's statement "yet another in a long line of publicity stunts."

"Cablevision is seeking a discounted 'package rate' without buying the entire package," Fox said in a statement.

Cablevision's subscribers, mostly in New York, have been without Fox signals since Oct. 16.

Fox has the exclusive broadcast rights to this year's World Series between the Texas Rangers and San Francisco Giants, and the first game started Wednesday at 7:30 p.m. Eastern time.

"I would have rather have watched it in the comfort of my home," said Cablevision customer Robert Mercado, 37, of Howell, N.J. Mercado had stopped at T.G.I. Friday's at Penn Station to watch some of the World Series before going home.

"I'm not happy," added Mercado, who said he spent the last two Sundays watching games at homes of relatives because of the blackout.

Bill Monteith, a financial consultant from Hoboken, N.J., said Wednesday he's had to come to the city to watch baseball games.

"I'd rather just drink and watch on my couch," Monteith said while watching the game at Stout, a sports bar in midtown Manhattan.

Fox's broadcast of the National League championship series, which the Giants won over the Philadelphia Phillies in six games, was blacked out to Cablevision customers.

Cablevision said Fox's rejection showed "beyond a shadow of a doubt" that Fox is negotiating "in bad faith."

"We call on the (Federal Communications Commission) to intervene immediately to restore the Fox signals to Cablevision's 3 million homes," it said.

On Tuesday, Cablevision CEO James Dolan sent a letter to FCC Chairman Julius Genachowski urging him to mediate the dispute. Fox has consistently rejected mediation and Genachowski has urged both sides to negotiate rather than attack each other publicly.

Last week, the FCC asked both companies for proof that they were negotiating in good faith.

Such good faith negotiations are a requirement in a law that allows broadcasters to bargain with cable and satellite companies for fees to carry TV signals that are otherwise sent freely to anyone with a proper antenna.

Cablevision told the FCC that Fox had demanded that Cablevision pay the same rate as Time Warner Cable for Fox 5 because of a previous deal that guaranteed Time Warner Cable would pay the lowest rate offered to any other distributor. If Fox dropped the rate, it would have to return money to Time Warner Cable, Cablevision said.

Although Cablevision customers appear to be caught in the crossfire, antenna sales are booming.

Antennas Direct, an online retailer, said it sold around 8,000 units in the New York area this month, up from an average between 1,700 and 2,100. On Wednesday, the site said it sold 500 antennas in the New York area, volume it typically handles in a week.

"We are blessed by the bad fortune and shortsightedness of the cable companies," President Richard Schneider said in a statement.

News Corp.'s widely traded Class A shares closed up a penny at $14.32 Wednesday. Cablevision shares gained 52 cents, or 2 percent, to close at $27.


Copyright 2010 by The Associated Press

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