Local Fox affiliates in Alaska have blacked out their programming from General Communication Inc. (GCI) in an ongoing dispute over rising retransmission fees.
GCI rebroadcasts KJUD-TV, based in Juneau. KJUD is an ABC affiliate owned by Vision Alaska LLC that also carries programming for Fox and the CW network on digital subchannels.
GCI believes that the agreement it signed with Fox in 2011 gave it retrans rights through 2018.
GCI reports that the owners of the Fox affiliates in Fairbanks and Juneau are demanding 300% increases in rates across multiple TV stations. GCI said the Fox interests implemented their blackout suddenly and unexpectedly earlier in November and have not relented.
“In Alaska that’s not called negotiating, that’s called robbery,” GCI said in a statement.
Fox, like just about every other programmer, has been trying to raise its retransmission consent fees as much as it can. The strategy has had a clear positive effect on the company’s bottom line. Boosted retrans fees along with increased ad revenue buoyed the company’s third-quarter financials.
For cable operators, resisting demands to pay steep retrans fee increases can be as perilous as knuckling under and passing along the costs, which further irritates consumers who are already perpetually aggrieved about subscription fees they always perceive as too high.
The alternative—refusing to pay the increases—often leads to programmers imposing blackouts that also irritate consumers. Some of the most avid viewers are sports fans, who tend to get particularly annoyed when they lose access to games. It is not a coincidence that the disagreement between Fox and GCI came to a head during football season; Fox carries a full lineup of NFL games.
And if this lose-lose situation weren’t bad enough, it’s turning into a triple lose-lose-lose. Wall Street is getting jaundiced about the entire pay TV segment for a number of reasons, but the uncertainty about retrans fees is prominent among them. Barclays just dropped the whole sector to neutral.
GCI has posted surveys that viewers can fill out to determine whether there are enough viewers willing to pay extra for Fox, but for now, the company is enduring the blackout.