Carey: Retransmission Modifications Could Imperil Free News, Sports, Entertainment

According to a copy of his prepared testimony, News Corp. President Chase Carey will tell a Senate Subcommittee that if the government modifies retransmission consent laws, local news on broadcast TV could be eliminated and high-value sports and entertainment content will migrate from broadcasting to cable.

He says retransmission is going through "growing pains" because broadcasters are, for the first time, seeking cash for their high-value, highly-rated content, just as cable channels have been doing all along. He says claims that broadcasters are seeking 100% increases is true: "Any increase over zero is a 100% increase." Carey plans to tell the legislators that Fox is asking a "more than fair" price for its stations given that some cable channels "command as much as $4 and $5 per sub." He points out that Fox has an average 8 million viewers per night in primetime -- "more than the top three cable channels combined." He says the comparison holds beyond price to "any comparison based on the quality and quantity of unique programming offered [or] the amount invested in programming," citing shows like Glee, House, The Simpsons and American Idol.

He says Fox is asking several times less than cable channels that have a fraction of broadcast ratings. He concedes that the two weeks when Fox was off Cablevision systems during its recent retrans impasse caused pain "primarily to viewers." But he says that had the FCC stepped in to try to force the parties hands, "Cablevision would not have come back to the bargaining table, and we likely would still not have a contract in place. But Carey suggests the dominoes would not stop falling with the impact on Fox or retrans deals. He says the real harm to consumers--the "30 million Americans who rely exclusively on over-the-air television"-- would result from government intervention and the resulting impact on the broadcast business model. "[I]f we can't sell our content for a price that allows us a fair return on our investment, we will no longer be able to invest in the high quality content that viewers enjoy," he warns.