Fox News blackout of Dish is on: Will Ergen dig his heels in?

Media conglomerate 21st Century Fox has removed Fox News and Fox Business from the programming guides of over 14 million Dish Network (NASDAQ: DISH) subscribers.

In a statement released Saturday night, Warren Schlichting, Dish senior VP of programming lamented, "It's like we're about to close on a house and the realtor is trying to make us buy a new car, as well. Fox blacked out two of its news channels, using them as leverage to triple rates on sports and entertainment channels that are not in this contract."

Joseph Clayton, Dish on Fox blackout

Dish CEO Joseph Clayton posted a video explaining the blackout to subscribers. View it here. (Source: DishStandsForYou.com)

"Dish has had a productive relationship with Fox for many years," added Schlichting. "We regret the service disruption to our customers, and remain committed to reaching an agreement that promptly returns this content to Dish's programming lineup."

"We care deeply about our viewers and hope that they will regain access to the number one cable news channel soon," Tim Carry, executive VP of distribution for Fox News Channel, responded to Variety. "We will continue to work around the clock to reach an agreement with Dish, as we have done with every other pay-TV provider for 18 years. This is the third time in as many months that Dish customers have suffered through a blackout due to Dish's intransigence."

Of all the carriage and retransmission sturm und drang Dish has recently endured--or perhaps generated--that an impasse with Fox should come to blackout seems almost surprising.

Dish Chairman Charlie Ergen spent much of his infamous "when we walk away, we're prepared to walk away forever" screed during his company's third quarter earnings report taking down Turner. He was especially hard on Turner's CNN channel, which Dish had removed from its service just days earlier. But in broaching that topic, he seemed to be marginalizing all of cable news, not just CNN.

"In fact, a lot of people get news from ... not TV anymore. They get it from their devices," he told investors.

CNN is back on the Dish guide, and the satellite company is progressing on a long-term overall deal with Turner. And earlier on Saturday, Dish finalized a multi-year agreement with Comcast (NASDAQ: CMCSA) for four regional sports networks.

So after Ergen made pointed remarks to investors in October, telling them to get ready for a future in which a pay-TV operator like Dish doesn't necessary carry every big network, it comes down to a battle with Fox News.

Was Ergen serious about digging his heels in on a big network? And if so, is Fox News--a currently hot but older-skewing channel steeped in linear distribution--that network?

For his part, Fox chief Rupert Murdoch downplayed the risk of a Dish battle to his investors during his Q3 call time, telling them, "There is no way" Ergen would challenge the cable news leader.

Certainly, the ratings reports for Fox News have been very strong recently, particularly during the election season, when the platform further extended its ratings dominance over CNN and MSNBC.

In fact, for certain prime-time performances in late-October and early November, the channel not only beat every broadcast news division, it also surpassed ESPN. However, it's hard to tell if the dominance being reported is really a reflection of Fox News' growth, or just weakening of other networks.

Is Fox News' recent momentum merely a blip? As recently as late May, all of the network's prime-time series were down year-over-year, with the network's overall audience performance declining 27 percent in total viewers.

So was Ergen's Q3 barrage really a subtle message to Fox and not a hammer-to-the-head for Turner, which claimed to be utterly baffled by the outburst?

If Ergen really believes distribution through IP devices is the future of news, CNN seems like an unlikely target for criticism. Certainly in the realm of linear television, the Atlanta-based CNN has had its lunch steadily fed to it by Fox News in recent years. But when it comes to mobile and social distribution, CNN is far and away the leader in cable news.

In any event, while Ergen was referring to CNN, his comments might of just as well have been directed to any of the other programmers Dish was haggling--or getting ready to haggle--with.

"Yes, we'd lose some customers, but we'd save a big, big, big check from a cash flow perspective," Ergen said.

Related links:
- read this Dish press release
- read this TV Predictions story
- read this Variety story

For more:
Fox News finds new way to scare its viewers, warns of Dish blackout
Fox News fans storm 800 line and website with Dish deal set to expire Saturday
Dish signs retrans renewal with Nexstar, avoids blackout of 60 channels

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