When a brand is acquired by another, it also takes over all the assets like customers, buildings, employees, and intellectual property. Does this mean that the larger company takes over agreements with the vendors as well? Fox News says no.
Charter Communications recently tried to extend Time Warner Cable’s carriage fee for their sibling Fox Business News across all their customers, as they have acquired Fox News. Usually, cable providers and media firms that own national and local channels, negotiate the carriage charges again when the previous agreement ends.
Charter and Fox News did this for the last time in 2014. But as per the reports of Wall Street Journal, Fox News has filed a lawsuit now, claiming that Charter Communications is now trying to apply old TWC agreement to all its customers.
Univision Communications, a media firm that operated local cable networks and broadcast stations, also filed a lawsuit against Charter Communications with similar accusations. They even claimed that the new administration is trying to pay low rates than that was originally negotiated.
As per some sources, the current agreement between Time Warner Cable and Charter Communications will expire in 2018. Though TWC says that Charter did not acquire all the operations under them, this is not the way mergers work in a corporate environment. The executive vice president of distribution for Fox News said that the agreement with Charter covers all the companies that work with them.
As per the opinions of the consulting firm SNL Kagan, Fox News is among the most costly cable channels getting average revenue of 1.41 dollars per household. This revenue is obtained as carriage fees from the cable providers. Fox has now filed a lawsuit against Charter Communications over issues on carriage fees and the court will have to decide on the same.