Summary:

After two weeks of dead air and hot air, Cablevision (NYSE: CVC) and News Corp (NSDQ: NWS) finally found enough good faith to reach a deal i…

Fox World Series 2010 "You Asked For It"
photo: Fox Sports

After two weeks of dead air and hot air, Cablevision (NYSE: CVC) and News Corp (NSDQ: NWS) finally found enough good faith to reach a deal in “principle” late Saturday afternoon — putting three Fox stations and several cable nets back on the air for more than three million cable subs. The retrans agreement came in time for World Series Game 3 and, likely more important for the NY region with the Yankees out, Sunday’s Jets-Packers match.

The news came a day after News Corp. and Dish Network (NSDQ: DISH) finally came to terms after a month-long standoff that kept 19 Fox regional sports nets off the satellite service and on the verge of a similar fate for the Fox broadcast network. News Corp.’s ability to reach a deal with Charlie Ergen and Dish without government intervention or binding arbitration knocked the legs out of Cablevision’s argument that those were the only ways to find a conclusion to its own two-week stalemate.

Cablevision and Fox resumed negotiations by phone before the Dish deal was announced. They hit a point early Saturday where it looked like a deal could be reached and by late afternoon, were ready to go. My understanding is it’s a four-year deal that compares financially to the one Fox managed with Time Warner Cable (NYSE: TWC) without blacking out its subs.

The deal covers Fox stations WNYW (NYC), WTXF (NJ) and WWOR (Philadelphia), along with Fox Business Network (back in those crucial Long Island homes), Fox Deportes and National Geographic Wild.

Deal but no peace: Usually in deals like this, the two parties agree to issue a joint statement or at least similar ones. Not so this time. Fox started by playing it safe. Cablevision execs stuck with the same tone from the dispute and the same accusations against Fox. For good measure, they blame being “forced” to act on the FCC’s inaction and try to convince subs that the two-week blackout was worth it because it saved them money:

In the absence of any meaningful action from the FCC, Cablevision has agreed to pay Fox an unfair price for multiple channels of its programming including many in which our customers have little or no interest. Cablevision conceded because it does not think its customers should any longer be denied the Fox programs they wish to see.

Cablevision thanks its customers for understanding the reasons for the dispute and for staying with us. We are also grateful to the 175 government leaders who raised their voices to urge government intervention and binding arbitration to prevent this blackout. It is clear the retransmission consent system is badly broken and needs to be fixed.

In the end, our customers will pay more than they should for Fox programming, but less than they would have if we had accepted the unprecedented rates News Corp. was demanding when they pulled their channels off Cablevision.

Fox’s response when asked about the tenor of Cablevision’s statement:

From day one Cablevision has been complaining about the fair market price. These comments should not surprise anyone, and they further confirm that this entire dispute was solely about Cablevision’s misguided efforts to effect regulatory change to their benefit.

Retrans legislation: Fox wanted a deal. Cablevision wanted to make a stand (or grandstand, depending on your POV). However either characterizes the results, the episode that took a major broadcast network off the air for more than 3 million people may be the impetus that leads to restrans legislation. In a Friday response to U.S. John Kerry, chairman of the Senate Commerce Subcommittee on Communications, Technology, and the Internet, FCC Chairman Julius Genachowski said he backed Kerry’s proposal for a legislative review of retransmission consent rules.( B&C has the text.)

Retrans isn’t the only item that could be affected. Fox’s decision early in the dispute to block Cablevision ISP subs from Fox programming online, an action that had the ripple effect of blacking it out on Hulu, added fuel to concerns about net neutrality. That comes at a crucial time for NBC Universal (NYSE: GE), one of Fox’s equity partners in the Hulu joint venture, as it waits for FCC approval of its merger with Comcast.

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