News Corp. pulls channels off Cablevision in impasse

News Corp. on Friday night pulled WNYW/5 and WWOR/9 off Cablevision systems in Long Island, New York, New Jersey and Connecticut, leaving viewers wondering how - or if - they'll be able to watch Saturday night's National League playoff game or Sunday's NFL Giants-Lions game.

The signals were pulled at exactly midnight without a word from either Fox or Cablevision. The screens were blank until 12:04, when a screen appeared saying "in these economic times, demanding $150 million dollars is unfair. Cablevision is willing to accept binding arbitration. We apologize for News Corp.'s action." A voice-over blamed "greed" on the Fox parent for pulling the stations.

The failure of both companies to reach an agreement followed a tense day of meetings between the companies - locked in a battle over how much the cable operator should pay for use of Channel 5 and Channel 9. Elected officials continued to put political pressure on both to enter into binding arbitration to avert a blackout. Fox had threatened to pull the signals at 12:01 Saturday.

Late Friday, Steve Israel (D-Huntington) said he had approached the Federal Communications Commission to mediate the arbitration, while adding in a statement that he had "pledged to keep the heat on both parties to come to the table without disrupting service." Earlier this week Cablevision agreed to binding arbitration, but News Corp. has rejected it.

Cablevision, which owns Newsday, has 3 million subscribers in New York, New Jersey and Connecticut.

The blackout comes after another on March 7, when Disney pulled WABC off Cablevision in a similar dispute over retransmission fees - or the fees sought from the broadcaster for use of its TV signals. That was resolved later that evening, minutes into the Oscar telecast.

The outcome of this dispute, however, remains unclear, and according to some observers, its underpinnings are more complex. Some industry observers speculated Friday that Fox is bound by a so-called "most favored nations" clause in a recent pact with Time Warner, which forbids it from agreeing to lower fees from another cable operator. If it were to agree to those lower rates with Cablevision, then Time Warner would automatically get those lower rates - meaning potentially the loss of millions of dollars in retransmission fees to Fox. (Time Warner has roughly 13 million subscribers.)

Cablevision has sought to get News Corp. and Fox to agree to binding arbitration and Friday sent out a list of 27 elected officials who were also supporting the initiative.

Charles Schueler, a company spokesman, said in a statement, "News Corp.'s decision to remove Fox programming from 3 million Cablevision households is a black eye for broadcast television in America. . . . We demand that News Corp. put the viewers ahead of its own greed and immediately restore these channels to our customers and agree to binding arbitration to reach a fair agreement. What is News Corp. afraid of?"

"In an effort to avoid this very situation, we started this process in May and made numerous reasonable proposals to Cablevision," said Mike Hopkins, Fox president of network affiliate Sales, who was spearheading the negotiation. "However, we remain far apart and Cablevision has made it clear that they do not share our view regarding the value of Fox's networks."

He added that Cablevision stopped negotiating at 8 p.m., "declaring an 'impasse.' "

Fox has been negotiating with Cablevision over a new retransmission pact for a year.