Sometimes there is a nice little spat in the entertainment sphere between cable operators and broadcasters over "carriage rates" -- the fees that cable companies pay broadcasters for their various programs. It's not all that rare or even especially important, except that innocent viewers often pay the ultimate price.
About five days ago, Cablevision (NYSE: CVC) and News Corp.'s (Nasdaq: NWS) Fox Network decided that now was as good a time as any for a brawl over rates. The argument revolves around how much Cablevision will pay to carry the network, and despite ongoing negotiations, things seem to be getting nowhere; or possibly even worse.
News Corp. took an unprecedented move by ordering Hulu (which is co-owned by News Corp., General Electric's (NYSE: GE) NBC, and Disney (NYSE: DIS)) to block Cablevision's Internet customers from watching Fox shows online. Here, of course, we start to get into the exciting world of network neutrality. I'll spare you an in-depth discussion; just note that News Corp. caved as word spread through legal corridors and past Washington.
The biggest losers in this mess are the nearly 3 million viewers in New York, Philadelphia, and Connecticut who have experienced blackouts. So far, New Yorkers have missed two of the NLCS baseball games in addition to a N.Y. Giants matchup. Not to mention episodes of House! How could they?!
The biggest winner of this may be Verizon (NYSE: VZ), whose FiOS service has complete Fox access and apparently is taking advantage of the Cablevision dispute. According to a Verizon spokesperson, the company stepped up its marketing to leverage its position and said, "We did have a busy weekend."
That's more than can be said by the 3 million New Yorkers and Phillies fans who are at risk of missing chunks of highly rated games.
If the Yankees or Phillies make the World Series, there could be a Fox-televised game as soon as Oct. 27; is there actually any chance that the blackout will still be in effect?
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