News Corp. COO Defends Retrans Rate Hikes

Just weeks after News Corp. and Cablevision agreed to terms after a bitter negotiation over program retransmission fees that cut the cable company’s subscribers off from the NFL, the World Series, Glee and other Fox network fare, News Corp. chief operating officer Chase Carey set the stage for significantly higher payments from cable operators in the future.
 
“We could have asked for a lot more,” Carey told attendees at the UBS Media Conference in New York, and would ask for greater sums in the future. While Cablevision accused the company of charging an “unfair price,” even after agreeing to terms, Carey indicated in his remarks that News Corp. has so far intentionally pursued shorter term deals with cable companies—compared to the 10-year agreement struck by CBS and Comcast—with an eye toward ramping up rates fairly quickly. The Fox broadcast network is the most important channel in the company’s portfolio “and should be the most profitable,” Carey said.
 
Indeed, Carey said that News Corp. and other broadcasters blew it by waiting so long to demand cash payments from cable companies for the rights to retransmit their program signals. Broadcasters “need a dual revenue stream, and we were remiss in not dealing with it earlier,” he said.
 
Carey also confirmed that News Corp. is reluctant to participate in Google TV before giving a lot more thought to a potential deal. “We need better clarity and understanding of what Google is doing before we participate,” he said, echoing similar comments made by CBS Leslie Moonves a day earlier at the same conference.
 
Meanwhile, Carey said Fox’s biggest upcoming programming initiative is the repositioning of American Idol on Wednesday and Thursday nights with a new set of judges. The goal, he said, is to revitalize the program, which has weakened in recent seasons, giving it “new energy.”
 
Currently, about half of the company’s $33 billion in revenues are derived outside the U.S., and Carey said the balance is likely to shift to international markets as the company continues to exploit pay-TV opportunities in markets like India, Italy and Germany.