News Corp.'s Carey downplays threat to make Fox a cable channel
News Corp. Chief Operating Officer Chase Carey rattled cages last month by threatening to turn his company’s Fox Broadcasting network -- home of “Family Guy,” “American Idol” and NFL football -- into a cable channel.
Carey threw down the gauntlet in early April at the National Assn. of Broadcasters convention. News Corp., he said, would take the extraordinary step of turning Fox into a cable channel if Aereo, the start-up Internet TV service that captures and transmits over-the-air signals of the broadcast networks to consumers, were allowed to flourish.
On Wednesday, Carey sounded less strident.
In a conference call with Wall Street analysts to discuss the company’s quarterly earnings, Carey refused to take the bait offered by an analyst who asked Carey to provide a financial breakdown of the costs associated with making such a move.
“You are getting farther down the road than I’m getting,” Carey replied.
“The point we are making is the broadcast business -- to be a healthy business and to be able to deliver the type and quality of events that it does -- needs to be a dual-revenue business,” Carey said.
If broadcast television were forced to rely solely on advertising income as it did in the past, these networks “would not be able to compete as effectively,” he said. Broadcast networks have huge costs for sports and scripted programming. Networks, including Fox, are increasingly relying on “retransmission fees” for their signals to help make ends meet.
The topic is one of the hottest in the television industry. And Carey’s comments came a day before U.S. Sen. John McCain (R-Ariz.) is expected to introduce legislation in Washington that would take away a company’s valuable broadcast spectrum if the company moved its best programming to cable.
McCain’s proposal is expected to be included in a bill that would allow consumers to pick and choose what TV channels they wanted to subscribe to.
Fox, CBS and other broadcasters are wrangling in court with Aereo, claiming the service infringes on their copyright. The broadcasters believe that Aereo is stealing their signals.
About 15 million homes in the U.S. do not have cable or satellite TV subscriptions, so the conversion of a major broadcast network to a cable channel would prompt an outcry.
On Wednesday, Carey said his company wasn’t planning any preemptive strikes.
“We like the broadcast model as long as our rights are respected,” he said. However, he added, “There are other paths we can pursue that would lead us to a very profitable business.”
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