LITTLE ROCK — Fox network owner News Corp. said Wednesday that it isn’t likely to reach an agreement with Time Warner Cable Inc. and expects to pull Fox broadcasting from the cable system when their deal expires today.
The dispute centers on the price New York-based Time Warner Cable, the second-biggest U.S. cable operator, would have to pay to continue carrying Fox programming, such as college and National Football League games and American Idol, the most-watched TV series in the U.S.
“We deeply regret that millions of Fox customers will be deprived of our programming,” News Corp. Chief Operating Officer Chase Carey said in a memo to employees. “We need to receive fair compensation from Time Warner Cable to go forward.”
The two sides have been unable to come to terms since midyear, Carey said. Time Warner Cable would accept federal mediation,Chief Executive Officer Glenn Britt said in a letter to U.S. Sen. John Kerry of Massachusetts. Both sides planned to continue to negotiate up to the deadline, Carey said.
“Fox isn’t looking for fair compensation, and we too are prepared to be without the Fox signal,” Alex Dudley, a Time Warner Cablespokesman, said. “We hope Fox doesn’t punish our customers, but that decision is up to them.”
“It’s mutually assured destruction if they don’t reach an agreement,” said Matthew Harrigan, an analyst at Wunderlich Securities in Denver. “This is a real face-off, and these guys aren’t posturing.”
As an alternative to arbitration, Time Warner Cable would like to enter an interim agreement to continue carrying Fox programs including football games on New Year’s Day and beyond, Britt wrote.
“Time Warner Cable welcomes your proposal to submit the dispute to binding arbitration,” Britt wrote to Kerry, a Democrat. Arbitration before the Federal Communications Commission can begin “immediately,” Britt said. A copy of the letter, dated Tuesday and released Wednesday by Time Warner Cable, was sent to Carey.
Scott Grogin, a spokesman for Fox, had no comment on the arbitration offer. Jen Howard, an FCC spokesman, declined to comment on whether the agency may mediate the dispute.
News Corp., the New York-based media company controlled by Chairman and CEO Rupert Murdoch, fell 6 cents to close at $13.91 in Nasdaq trading. Time Warner Cable dropped 60 cents to $41.83.
Business, Pages 23 on 12/31/2009