December 18, 2009 / 1:20 PM / 10 years ago

UPDATE 3-Fox says Time Warner Cable may drop Fox TV shows

* Fox says it has been in talks with TWC for 9 months

* Fox says there is possibility TWC will drop Fox shows

* Time Warner Cable calls Fox’s demands “unreasonable”

* Fox seeks $1 a subscriber payment for broadcast - source

(Adds source, background, byline)

By Franklin Paul and Yinka Adegoke

NEW YORK, Dec 18 (Reuters) - News Corp (NWSA.O) warned that testy carriage negotiations with Time Warner Cable Inc TWC.N could leave viewers unable to see programming from its Fox broadcast network, including it blockbuster hit “American Idol” and NFL football.

Negotiations between the two sides have been primarily held up by a disagreement over the value of Fox’s free-to-air broadcast network. Fox is asking Time Warner Cable for around $1 a subscriber in payment for the retransmission rights to carry its network, according to a person familiar with the talks.

Time Warner Cable executives have balked at paying that much and have claimed that negotiations with broadcast companies like Sinclair Broadcast Group Inc (SBGI.O) and Local TV which carry local affiliate stations are in the 25 cents to 50 cents a subscriber range.

CBS Corp (CBS.N) CEO Les Moonves, who has been a very vocal supporter of getting pay-TV providers to pay cash for the right to carry his broadcast network, has publicly said he expects his company to be paid around 50 cents a subscriber.

Fox said it has for the past nine months attempted to “negotiate in good faith” with Time Warner Cable, the No. 2 U.S. cable operator, which serves some 14 million customers, and said those talks are ongoing.

But there is a “very likely possibility that Time Warner Cable may choose to no longer carry Fox Broadcasting, Fox Cable and Fox regional sports programming,” Fox said.

The negotiations do not include Fox’s news channels or National Geographic channel in which it has a 50 percent stake.

Executives at Time Warner Cable will be hoping to reach an agreement ahead of Jan. 12, when the new season of hugely popular “American Idol” returns to air.

Time Warner Cable confirmed that the talks are ongoing but said Fox’s current demands “are unreasonable and excessive, especially in this economic climate.”

“We hope Fox won’t punish our customers by taking their programming away while we try to reach an agreement,” said spokeswoman Maureen Huff.

Time Warner Cable is also in carriage negotiations with The Weather Channel and Scripps Networks Interactive Inc SNI.N, which owns stations like the Food Network and HGTV.

Fox said it has launched a marketing campaign to notify Time Warner Cable’s customers of the possibility they may lose access to some of their favorite entertainment and sports shows.

It follows a similar PR and marketing campaign launched by Time Warner Cable last month, asking its subscribers to register their displeasure with programmers’ demands for higher fees, which it claimed leads to rising subscriptions for customers. In its campaign, it claimed some programmers are asking for as much as a 300-percent increases.

Heated disputes over transmission rights sometimes boil over, to the detriment of viewers.

Last year Time Warner Cable had a similar dispute with Viacom VIAb.N, owner of networks MTV and Nickelodeon, which went right down to the wire on Dec. 31 before both sides came to an agreement.

But in 2000 a similar dispute between Walt Disney Co (DIS.N) and Time Warner left millions temporarily unable to see Disney’s ABC-TV programs on Time Warner Cable systems. Customers saw only a blue screen and a banner headline proclaiming “Disney has taken ABC away from you.”

Time Warner Cable was spun off from its parent Time Warner Inc TWX.N in March this year.

Reporting by Franklin Paul and Yinka Adegoke; Editing by Gerald E. McCormick, Phil Berlowitz

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