Fox-Cablevision fee battle: Dumb and Dumber Part 2

Jim O'Neill, editor FierceIPTVSometimes, businesses make poor decisions, other times, just plain dumb ones.

  • Mars saying "No" to Universal Studios when it asked to use M&Ms candy and do a cross promotion with E.T. The Extra-Terrestrial? A poor decision. Hershey's gobbled that one up and saw its sales of Reese Pieces rocket.
  • Decca records deciding against signing a little foursome from Liverpool named The Beatles? Dumb.
  • Or, how about this gem from Microsoft CEO Steve Ballmer in a 2007 USA Today story: "There's no chance that the iPhone is going to get any significant market share. No chance." OK, that's not technically a decision, but dumb? Yep.
  • And, where's Jerry Yang's resisting an estimated $44 billion buyout of Yahoo by Microsoft in 2009 rank? Um, dumb. (Of course, so was the $44 billion price Microsoft offered. Dumber.)

Ah, hindsight.

But, you don't have to be an MBA, fortune teller, or even much of a thinker to know that the battle between News Corp. and Cablevision over retransmissions fees for Fox, a battle that has resulted in the network being unavailable to some 3 million Cablevision customers for more than two weeks in the New York and Philadelphia markets, is going no place fast. In fact, the retrans fight has claimed the unenviable title of the longest on record.

And that's causing more than a little angst among viewers who so far have missed the National League Division Series (Philadelphia lost to San Francisco), a couple of Sunday's worth of football (with both New York teams playing some of their best ball of the year), Glee! and, of course, an assorted array of other Fox fare. And, with no end to the spat in sight, those viewers are looking at a fall without a classic; no World Series (which, with just the Texas Rangers and San Francisco Giants is really just the Western-half of the United States Series, but I digress).

The two sides have met only sporadically, and continue to throw mud at each other and act as petulantly as spoiled two-year-olds.

Cablevision is claiming News Corp. Is offering a "take it or leave it" deal that will cost them in the neighborhood of $150 million, more than they pay for ABC, CBS and NBC combined.

The folks from News Corp. cast Cablevision's CEO Jimmy Dolan as the culprit, saying the only deal he'll accept will be one that involves political or regulatory relief and denying they ever made a take-it-or-leave-it demand or asked for $150 million. They just want the feds to walk away and let them make a deal with Cablevision, which is a good idea, assuming a deal can be made.

It's pretty bizarre watching this one act play as it works its way across the public stage (now, that's always a great negotiating tactic, take it all public). You know that Cablevision must be hemorrhaging subscribers, and Fox has got to be taking it in the chops on the advertising revenue side. And, neither can afford to. The cable industry, as we all know by heart, dropped 711,000 subscribers last quarter. News Corp., meanwhile, has acknowledged that Fox is losing money on programming this year and is looking at the higher retrans fees as new revenue.

So what good does a protracted blackout do for either side?

Zilch. Nada. Neither side is earning much out of this but a black eye and the ire of 3 million cable subscribers who already think their bills are too high. And, if something doesn't happen soon, another 3 million Dish Network subscribers are going to be looking for a way to watch the NFL, the World Series and Glee! after Oct. 31 when the satellite provider's deal with Fox expires.

In the end, when this is finally all worked out, perhaps there will be a screenplay that'll come out of it. How's Dumb and Dumber: Part 2 sound? -Jim