Cox is in no danger of losing a cable channel anytime soon

No disputes on horizon for Cox like the ones other cable companies faced.

Published: Saturday, January 16, 2010 at 6:01 a.m.
Last Modified: Friday, January 15, 2010 at 11:38 p.m.

The scenario had the potential to create apoplexy in parts of the Gator Nation.

Fox threatened to go off the air at midnight on Jan. 1, the day of the Sugar Bowl and Tim Tebow's last game, when negotiations broke down with Time Warner Cable/Bright House Networks over increased retransmission fees sought by Fox.

Two Gator fans in Orlando even sought an injunction to prevent that from happening, citing the irreparable harm it would inflict, before a judge threw the case out.

Fox granted a brief extension and reached a final agreement with the cable operators later that day, with no disruption.

The public dispute was one of several nationwide as agreements expired at the end of the year between cable carriers and broadcast networks or cable channel programmers.

Networks and cable programmers faced with increasing costs of producing shows and shrinking advertising revenues are seeking higher fees from cable carriers fighting to hold down the costs they pass on to customers already squeezed by the economy.

Broadcast networks are particularly squeezed since advertising has been their sole source of revenue, while cable programmers also have subscription fees.

Cox Communications - the largest cable operator in Alachua and Marion counties - is in no danger of losing a channel anytime soon, company representatives said.

The company negotiated a number of multi-year deals at the end of 2008 and beginning of 2009, said Mike Giampietro, vice president and general manager of Cox Central Florida.

Most recently, the company completed a deal last week with Viacom, which owns Nickelodeon, Comedy Central, MTV, VH1, BET and other channels, said spokesman David Grabert from the Atlanta headquarters.

Giampietro recalls a public dispute about five years ago when Cox pushed back as ESPN sought to double or triple its rates. ESPN eventually settled for a lower increase, he said.

ESPN is one of the cable channels operators don't dare go without, said Amy Jo Coffey, assistant professor of telecommunications at the University of Florida, who also counts CNN and Fox News as essential.

"In some cases the cable programmer does have the upper hand," she said.

But for others, the carrier may be willing to accept the number of customers upset by losing a channel compared with the business considerations of raising costs to keep it, she said.

Last summer, Tampa Bay Rays games were pulled from Fox-owned Sun Sports as Cox refused to pay higher rates for a 75-game package. In that case, Sun Sports sought higher fees for one program rather than the whole channel. They came to an agreement in time to show the final 20 games.

When a channel does go dark, the channel owners often count on public opinion blaming the cable provider. But providers are increasingly taking pre-emptive actions to win the public.

Cox did just that by reaching out to customers in the ESPN dispute, Giampietro said, and had good support in its effort to hold down prices.

"My guess is if we had lost ESPN at 12:01, that support might have changed dramatically," he said.

Last week, CableVision took out a full-page ad in The New York Times after Scripps Networks pulled the Food Network and HGTV from several markets in the Northeast after seeking a $20 million rate increase.

"We didn't take Food Network and HGTV off your TV, Scripps Networks did," the ad said.

"Obviously, they don't care about you, the viewer, as much as they claim to."

Sinclair Broadcasting Group and Mediacom Communicatons Corp. also completed their retransmission agreement on Jan. 7, a day before an eight-day contract extension was set to expire as Sinclair sought higher fees.

While some costs of doing business go up, the recessionary pressures mean programmers and operators are having to cut the costs they can control and operate more efficiently, Giampietro said.

"We've tried very hard not to change prices in this environment and been more aggressive in some of our marketing efforts, deeper promotions," he said.

The number of Gainesville cable subscribers is fairly steady, he said. What has changed is that fewer people are taking the premium channels, "fewer HBOs."

For cable operators nationwide, it's a matter of making costs go up less rather than not at all, he said.

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