The spat between News Corp. and Cablevision System Corp. that blacked out Fox programming for more than 3 million subscribers may raise hurdles for Comcast Corp.’s $28 billion deal to take control of NBC Universal.
Comcast, which is buying a majority stake in the media company from General Electric Co., may receive heightened regulatory scrutiny as a result of the dispute, said James Rat cliffe, an analyst at Barclays Capital in New York. The Federal Communications Commission is reviewing the acquisition.
“In light of the Cablevision- Fox dispute, there is clearly more attention being paid to program access, making restrictions more likely,” Ratcliffe said in an Oct. 25 note to investors.
News Corp.’s Fox blocked its programming, including two World Series games, from Cablevision for two weeks, until Cablevision agreed last week to pay what it called an “unfair price.”
U.S. regulators will want to prevent Comcast from using the threat of cutting off NBC programming to gain higher fees, Ratcliffe said. Comcast, unlike News Corp., may have the added incentive of blocking channels from rivals such as Douglas County-based Dish Network Corp. to help lure customers to its cable service.
Rep. Maxine Waters, D-Calif., said the Fox-Cablevision spat made her “increasingly concerned with the potential harm” if a dispute arose between an enlarged Comcast and competing provider. In a letter to FCC Chairman Julius Genachowski last week, she called for “substantive and enforceable conditions” to preserve competition.
