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Cablevision, Fox Continue Blackout Spat to World Series Start

Oct. 27 (Bloomberg) -- Cablevision Systems Corp. and News Corp. traded a new round of accusations in a dispute over programming fees that has blacked out Fox television service for 3 million Cablevision customers in the New York area.

Cablevision today offered to pay Fox the same rate it charges Time Warner Cable Inc. for Fox broadcasts for one year, in a bid to restore programming ahead of tonight’s World Series start. The Bethpage, New York-based company said the proposal was in the best interests of baseball fans and Fox viewers.

News Corp.’s Fox refused the offer, saying Cablevision is seeking a “discounted ‘package rate’ without buying the entire package,” Fox said in an e-mailed statement.

The blackout started Oct. 16 when News Corp. cut its Fox signal to Cablevision. The companies have been deadlocked over how much the cable company should pay for Fox broadcast stations and the Fox Business, Nat Geo Wild and Fox Deportes cable channels. The impasse threatens to leave Cablevision subscribers without the Fox network as it begins the World Series broadcast at 7:30 p.m. New York time.

“We are very disappointed that we offered News Corp. what they asked to be paid,” said Charles Schueler, executive vice president at Cablevision, in an e-mailed statement, “and News Corp. has said no.”

Cablevision again called on the U.S. Federal Communications Commission to intervene and to require Fox to agree to binding arbitration. Fox has rebuffed arbitration, saying direct negotiation is the only way to resolve the dispute.

Rising TV Fees

The FCC is looking into whether Cablevision customers should receive refunds for programming missed during the dispute, a person familiar with the agency’s deliberations said. The person spoke on condition of anonymity because the deliberations aren’t public.

News Corp. was in a similar fee dispute with Time Warner Cable late last year, and sought $1 a month per subscriber for its Fox stations, people familiar with the matter said at the time. Terms of the agreement with Time Warner Cable were not made public.

Time Warner Cable may have agreed to pay Fox, on average, more than 50 cents a month per subscriber, according to Rich Greenfield, an analyst at BTIG LLC in New York. In that agreement, signed early this year, Fox will likely receive retransmission fees below 50 cents in the first year, with payments escalating annually over the contract’s four- to six-year span to 75 cents, Greenfield estimated.

“We have told Cablevision all along we are willing to negotiate a deal -- based on an entire suite of channels -- under the terms we have reached with Time Warner Cable and other providers, or a standalone agreement for WNYW FOX5, WTXF FOX29 and WWOR My9,” Fox said in its statement.

News Corp., based in New York, rose 1 cent to $14.32 at 4 p.m. on the Nasdaq Stock Market. Cablevision gained 52 cents, or 2 percent, to $27 in New York Stock Exchange composite trading.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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