Fox network is threatening to drop some affiliates if the stations do not agree to share a cut of the retrans fees they receive from cable and satellite operators.
According to Bloomberg:
Without an agreement on a new fee schedule, Fox “will have to pursue different distribution channels to receive fair value for our programming and continue to serve our viewers,” Michael C. Hopkins, president of affiliate sales and marketing, said in a Feb. 4 letter to station owners.
Fox’s aggressive stance is part of News Corp.’s plan to wring additional revenue from its broadcast unit. Chase Carey, News Corp.’s president and COO, said recently that he thinks the Fox network should look more “like a cable network” with “two meaningful streams of revenue–subscription and advertising.”
Fox has been in discussions with the affiliates’ board about a new fee structure but has now decided to negotiate directly with station owners. Brian Brady, president and CEO of Northwest Broadcasting, and chairman of the affiliate board, said that Fox is trying to “divide and conquer.”