When one brand takes over another, it takes over the other company’s assets, which include customers, intellectual property, buildings, and employees. Does the larger company get to take over agreements with vendors and extend them across the entire company, though? Fox News says that no, they do not, as Charter tries to extend Time Warner Cable’s carriage fee agreement for the channel and its sibling Fox Business News across all of its own customers now that it has acquired the smaller company.
Cable providers and the media companies that own local and national cable channels re-negotiate those carriage rates at the end of each agreement, and the last time that Charter and Fox News did so was 2014. The Wall Street Journal reports that now that the merger of
Time Charter Cable Charter, Time Warner Cable, and Bright House is complete, Fox News claims in a lawsuit that Charter is trying to apply the old Time Warner Cable agreement to all of its customers.
Univision Communications, which operates local broadcast stations as well as cable networks, has also filed a lawsuit against Charter making similar accusations that the company is trying to pay lower rates originally negotiated for Time Warner Cable.
A “person familiar with the matter” told the WSJ that the current Time Warner Cable and Charter agreements expire in 2018. The cable company, for its part, insists that Charter didn’t acquire Time Warner Cable, and that Time Warner Cable now operates cable systems that Charter previously operated.
That’s not really how the merger worked on a corporate level, though: Charter bought the two smaller companies. Also, the executive vice president of distribution for Fox News explained to the WSJ that the news channels’ agreement with Charter covers companies that Charter acquires. So there’s that.
By the way, according to consulting firm SNL Kagan, which is not affiliated with the TV program Saturday Night Live, Fox News is one of the pricier cable channels out there, receiving an average of $1.41 per household in carriage fees from cable providers.
Fox News Sues Charter Communications Over Carriage Rate [Wall Street Journal]