New report examines how Fox Corp. leverages sports and entertainment to force cable providers to charge more for Fox News
Written by Media Matters Staff
Published
In The Guardian, Katie Thornton explores in detail how Fox Corp. uses bullying tactics in negotiating carriage fees with cable companies; these carriage fees result in cable and satellite consumers being charged dramatically more for Fox News than CNN and MSNBC combined — regardless of whether they watch Fox at all.
Thornton also notes that Fox Corp. is currently in negotiations with three cable companies. As we have documented, Lachlan Murdoch has been clear that he expects record hikes in those fees, and that he would use Fox Corp.'s sports rights as leverage to do it. This means Fox would force cable companies to charge consumers even more money to be funneled into the Murdochs’ pockets.
Media Matters has launched the No Fox Fee initiative to empower consumers to fight back. Go to NoFoxFee.com to find out how you can contact your cable company to tell them that you don't want to pay the Fox Fee.
Here's some of how Thornton describes about how Fox negotiates these fees:
The issue at hand was a dispute over cable carriage fees: a little-known – and, for Fox, highly lucrative – revenue stream paid by cable companies to television networks in exchange for the rights to broadcast their content. Every three years, cable providers and TV networks agree on a flat, monthly fee that is passed on to the subscriber – and, since cable subscribers generally do not get to choose what channels are part of their cable bundle, that fee is paid regardless of whether or not the subscriber watches a given network.
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Leaning on its huge variety of sports and entertainment programming alongside the zealousness of the Fox News audience, Fox has made itself a formidable opponent when negotiating fees – fees that are now significantly higher than cable companies pay to most other networks, and which may continue to climb.
But with Fox Corporation renegotiating 70% of its contracts in the 2023 and 2024 fiscal years, there are signs that the multibillion-dollar media empire may be losing some of its bargaining power. Critics of Fox News have been increasingly vocal about their opposition to Fox’s strong-arm tactics: in 2021, the NAACP sent a scathing letter to the NFL commissioner, Roger Goodell, telling the league to stop letting Fox use the NFL as a bargaining chip in its carriage fee negotiations for Fox News. “The NFL’s programming should not be used as a bargaining tool for Rupert Murdoch to help fund Fox News’ hatred, bigotry, lies and racism,” the NAACP president and CEO, Derrick Johnson, wrote.
In recent years, it appears that some Fox News negotiations are happening separately from Fox Sports negotiations. Carusone suggests it may be due to the Covid pandemic’s disruption of live sports and corresponding changes in contract terms.
Still, while the number of cable subscribers plummets, ever-increasing carriage fees are helping networks like Fox News stay afloat and buffer themselves from public accountability. Heresco says that arrangement always puts customers on the losing end. “I’m generally a pretty optimistic person,” he says, “[but] I don’t think these opaque, black-box, long-term, multibillion-dollar negotiations in which the audience is enlisted and weaponized by one company against another company – I don’t think there is any scenario in which that actually benefits democracy, or citizens, or education, or accurate information.”