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Sunday, October 30, 2011

DirecTV, News Corp. far from pact on carrying the media giant's cable channels

LOS ANGELES -- With three days to go before their current agreement expires, DirecTV and News Corp. are still far apart on a deal to keep more than 25 networks on the satellite broadcaster's programming service.

Among the News Corp.-owned channels DirecTV is prepared to drop Tuesday are the popular FX network and 19 regional sports channels. Not part of the dispute are Fox's broadcast television stations and Fox News.

DirecTV said News Corp.'s Fox Cable unit was demanding a 40 percent fee increase to keep carrying the channels. In a video to subscribers, DirecTV CEO Mike White said the company already pays News Corp. "nearly a billion dollars a year" for their channels and that this increase was "entirely too much."

Scott Grogin, a spokesman for the Fox Networks Group, called the 40 percent figure "ridiculous" and added that "even if you included the Fox stations in the negotiation, it still would not reach 40 percent."

Contract disputes between distributors and television networks are becoming more commonplace in the media industry. As programming expenses rise, networks look to distribution fees to help cover their costs. At the same time, distributors fear losing customers because of rising bills.

This particular spat got nasty fast. Although Fox offered to allow the channels to remain available after Tuesday's deadline, DirecTV last week alerted its 19.4 million subscribers that it would be dropping the networks. That DirecTV made that announcement the day before News Corp.'s Oct. 21 annual meeting with shareholders was not viewed as a coincidence inside the media conglomerate.

Fox fired back with ads telling DirecTV subscribers to find a new distributor.

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