Why is Fox off the air on DirecTV?

Fox blackouts DirecTV as contract terminates

Friday night, millions of DirecTV subscribers awoke Saturday morning with Fox owned and operated local stations in several large markets no longer accessible through the satellite service due to the expiration of the prior carriage agreement that did not grant DirecTV the right to deliver Fox programming to its viewers.

Fox owned and operated stations that became unavailable to DirecTV customers included the stations in New York, Los Angeles, Chicago, and Philadelphia among others, as well as various Fox cable channels such as FS1, Fox News Channel, Fox Business Network, FX, and Nat Geo.

This is a big blow to the satellite subscribers who rely on the provider for important programs such as NFL games that are aired on Fox broadcast stations and Fox News Channel especially during election seasons. Local news that airs on the Fox local stations has also been important for those watching DirecTV especially during the coronavirus pandemic.

Hence, there has been no progress made despite the extention.

The two sides had renewed their earlier carriage contract severally while engaging in negotiations for the new multi-year agreement. However, because of the extinctions, the talks did not lead to an agreement that would have prevented Fox from pulling its signals from DirecTV once the final deadline was over the weekend.

According to Fox In a statement, we provided DirecTV with an extention so that consumers could not lose Fox programming while parties sought to reach a new agreement, however DirecTV rejected the offer.

DirecTV responds that the extention Fox proposed was the same extention that DirecTV had proposed to Fox severel times before.

Increasing Carriage Fees as the Root of Conflict

One can only assume that money is at the heart of the discussions. Most notably, how much will DirecTV have to pay Fox in fees for distribution of its stations and cable channels under a multi year agreement.

Over the last few years, the cost for distribution of broadcast and cable programming has escalated with networks relying on must have programs such as NFL to pressure TV service providers to pay higher rates. Distributors have on the other end countered the demands by saying that increasing programming costs are pushing the end consumer price up.

The end consequence has been a number of public carriage disagreements between networks and TV service providers, ranging from cable systems to streaming services, making programmes unavailable and subscribers locked out of content they have paid for.

This is because both sides are motivated to make a deal to end the conflict in order to achieve their respective objectives.

But in the end, both Fox and DirecTV stand to benefit from the negotiation process. Similarly for DirecTV the access to some of its important programmes especially live sports from its key partners such as Fox and the NFL is a disaster. Football games started and fans turn to DirecTV to get NFL Sunday Ticket package which is a problem when Fox NFL broadcasts are missed.

On the same token, Fox cannot underestimate the importance of not having its programming taken off one of the few remaining major satellite platforms, thus losing millions of subscribers and seeing the viewership of its programs drop. Thus, since Fox is currently behind other networks, a lower rating would reduce its bargaining power even more in future carriage contracts.

Customers are always on the receiving end of these fights between these large media firms that deny them programs to watch. However, for Fox and DirecTV no deal is a lose-lose situation which gives both parties plenty of motivation to get down to business and sign a new contract.