Your cable or streaming TV bill will increase once again as Fox executives told cheering investors this morning it would hike prices for carrying Fox TV stations and its suite of cable networks, including Fox News Channel, Fox Business, Fox Sports 1 and 2, and the Big Ten Network.

“We plan to meaningfully accelerate growth of both direct retransmission and non-[owned and operated] revenue and we believe the broadcast economics we receive are quite underpriced relative to the quality of the content we are providing,” said Fox chief operating officer John Nallen, speaking at a Fox Investor Day event.

Fox’s contracts with most cable, satellite, and streaming providers are coming up for renewal over the next three years, and it should not surprise providers to see substantially higher renewal pricing than ever before to continue carrying Fox’s networks. Fox plans to leverage the increasing amount of live sports on its broadcast network and the relative popularity of Fox News Channel to demand higher compensation. Fox was already collecting 29% more in retransmission consent-related revenue during the third quarter, but that percentage is expected to grow dramatically as new contracts are signed.

Fox News is already the most costly cable news network, and as other broadcast TV networks demand ever greater compensation from cable and satellite providers, Fox executives feel they are not asking as much as they could for their channels. That is an important consideration for Fox, which slimmed down dramatically after a sale of most of its assets to Disney. The ‘new’ Fox is made up of the Fox television network, 28 owned and operated Fox affiliated TV stations, cable news and business, and three sports channels. Nallen sees no need to expand the network lineup further.

“We are no longer lending the potency of our marketing brands toward any other initiative, brand or channel development,” Nallen said. “The purity of this sustained value opportunity from our Fox brands is critical as we are not tethered to any properties that are just getting harder to defend. This frees us up to capture the full value of all our brands across broadcast and cable.”

Nallen knows some cable operators have grown increasingly disenchanted with selling television service, and acknowledged some cable companies may balk at Fox’s new asking price, especially as cord cutting continues to accelerate. He told investors he is technology agnostic about who he sells Fox networks to, so it would come as no surprise if a streaming TV service eventually breaks into the top four Fox channel distributors. At the same time, as prices continue to rise, some traditional cable operators could eventually stop selling television service altogether.

Rupert Murdoch’s slimmed-down television empire will refocus on targeting America’s red states and live sports fans who may have wagered on those popular online casinos.

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After Murdoch completes the sale of most of 21st Century Fox and its studios to either Disney or Comcast, the “New Fox” that will remain will include Fox News Channel, Fox Business Channel, the Fox television network, MyNetworkTV, some sports channels, and 28 owned and operated local television stations. In short, it will be a $23 billion company focused almost entirely on legacy television.

To maximize the value of those remaining assets, “New Fox” will double down on live television to attract and hold the “core Fox viewer,” one who instinctively watches Fox News, enjoys live sports, and more than likely lives in a conservative-leaning state.

Brandon Ross, an analyst at BTIG Research, believes “New Fox’s” crown jewel will be the Fox News Channel, not the Fox television network.

“The strongest asset that’s in their portfolio going forward is Fox News,” Ross said, noting that dedicated viewers of the network will likely see promotions from other Fox-owned networks that will increasingly cater to the interests of the average Fox News viewer. Research shows Fox News attracts an older, conservative, and very loyal audience that is more likely than other demographic groups to also watch live television sports and pay for cable television.

Murdoch’s recent content deals hint he intends to increase Fox’s focus on live sporting events. Last week, CNN reported Fox acquired the rights to broadcast “WWE SmackDown” for the next five years. Earlier this year, it signed another five-year deal to air Thursday night NFL games.

Fox’s scripted television shows will likely take a hit as a result, as investments shift towards live news and expensive sports programming. Murdoch may be signaling it won’t continue trying to keep up in the battle between Amazon, Hulu, and Netflix vs. traditional linear/live television over scripted dramas, original movies, and other pre-produced content. Murdoch’s ability to rely on traditional scripted shows for revenue may also be waning as online content companies break the traditional 24-26 week ad-supported television season.

Netflix’s original content budget was around $6 billion in 2017, more than CBS spent on its own shows. This year it expects to spend up to $8 billion, more than CBS, FOX, and ABC. Fox can still fall back on the two strengths network television still commands — live news and sports. News programming, particularly the kind of political opinion shows Fox airs during the evening, are extremely cheap to produce and attract a loyal audience. Sports programming, in contrast, is extremely costly to acquire. But like news, surveys show more than 90% of viewers watch live, commercials and all.

Jay Rosenstein, a former CBS Sports executive, told CNN that is what makes sports so valuable for a legacy business like Fox.

“There’s been a certainty about sports programming that doesn’t exist with scripted or unscripted programs,” he added. “With sports, you have a known quantity.”

Live sports is one of the few types of programming left where viewers don’t instinctively reach for the remote to fast forward through advertising. Scott Rosner, the academic director of Columbia University’s Sports Management Program, said networks like Fox depend on that to make money.

“What that means is you are sticking around as the viewer,” Rosner said. “You’re far more likely to watch advertising that is being put in front of you.”

That adds up to a lot of advertising revenue because no other programming comes close to beating the ratings of live football games, according to Ross. Networks spend a lot on sports programming, but also earn a lot from lucrative and frequent ad breaks.

Networks opening their checkbooks to spend billions on sporting rights prefer long-term, stable contracts even if they have to spend more to get them. The streaming services, as well as some social media sites, are also dabbling in live sports streaming, and with their deep pockets, traditional broadcast networks could eventually be outbid. At Fox, they have about five years before they need to worry about renewing the contracts they just signed.

“New Fox” will also recoup some of their recent investments from viewers like you. Many expect Fox and their television stations will raise retransmission consent fees charged to your cable, phone, satellite, or online provider to carry Fox-owned networks and stations on the lineup.

Fox Networks Group is nearing a deal with Charter Communications that will keep several Fox-owned channels from disappearing from the Spectrum cable dial.

Recently, Fox has stopped running ads attacking Charter’s potential disruption of FX, National Geographic, and a number of Fox regional sports networks. Fox has also extended its deadline several times, and Fox programming continues uninterrupted on Charter’s cable systems as the talks continue.

Now FNG president and COO Randy Freer is ready to say publicly, “we’re working out the issues.”

Broadcasting & Cable reports one of those issues could be the ongoing lawsuit between Fox News Channel and Charter that was filed after acquiring Time Warner Cable. Charter began paying Time Warner Cable’s considerably lower FNC affiliate fee in markets where Charter’s original cable systems were under contract at a higher rate. One part of the agreement may be a settlement of that lawsuit.

There is no word on exactly when a final agreement will be reached, but it is increasingly unlikely the negotiations will result in any dropped channels for Charter customers.

Nolte: Time to cut the cord and starve left-wing media.

The only solution to stop the “largest swindle big business ever played on the American people” is to cut cable television’s cord and stop paying for channels you do not want or need.

That advice comes from the conservative Breitbart News Service, among the first to make cable television bundling a political issue:

Meanwhile, for around $100 a month pay TV is not only pummeling you with about 20 minutes of ads an hour, but forcing you to pay for a ton of networks you hate. Moreover, many of these networks get a chunk of your cable bill. Even if you don’t watch left-wing CNN and MSNBC, if they are on your package, chances are a part of your bill is going directly to both.

If you want to put CNN, MSNBC, MTV, and all these other low-rated, left-wing networks out of business, not watching them makes absolutely no difference.

You have to cut the cord.

Nearly half of CNN’s revenue comes from this immoral revenue stream. CNN is taking your money to attack you all day every day.

And that is the great con the gigantic left-wing multinationals have pulled off for decades. Something like 100 million homes keep hundreds of networks profitable by forcing those customers into overpriced cable packages. Maybe 15 cable networks could survive solely on ad revenue generated by actual eyeballs. The rest would go poof, and good riddance.

Author John Nolte, editor-at-large for the news service, blames big cable bills on the “Hollywood rich” who he writes just keep getting richer. He thinks a better solution is to sign up with Netflix or Amazon and say goodbye to cable television.

Breitbart News, Nolte writes, “has been way ahead of the curve” predicting the demise of the one-size-fits-all cable television bundle that customers can hardly afford “while Obama’s economy falters and an influx of illegal aliens keep wages depressed.” Nothing stops the rate increases until consumers cancel the service, Nolte believes.

Reader reaction to the piece quickly identifies one shortcoming for conservatives: the loss of Fox News Channel. But many comments expressed the view Fox News has gone “Republican In Name Only” and isn’t worth paying for either. Many conservatives taking anti-corporate political views prefer alternative media like Breitbart News Service and Glenn Beck’s TheBlaze, which ironically has tried to land cable carriage agreements for years with only limited success.

All of these media and content companies may be up for grabs.

Could Rupert Murdoch become the next owner of CNN? Will Verizon consider buying out the owner of more than a dozen cable networks, or the Walt Disney Company, owner of ABC?

Since 1983, media moguls have assembled annually in posh Sun Valley, Idaho to talk business. But never have they met while several huge consolidation and merger deals are on the table among their colleagues. Comcast acquiring Time Warner Cable and AT&T buying out DirecTV are both seen as game-changers among Wall Street bankers and the media elite, leaving many self-consciously pondering whether they are no longer big enough to stay competitive in a consolidated media world.

The Wall Street Journal and the Atlanta Journal-Constitution both report that at least one huge merger deal could emerge as a result of this week’s conference. Among the most likely buyers is FOX CEO Rupert Murdoch, who is reportedly looking to buy a major content company.

The most likely target is Time Warner (Entertainment), former owner of Time Warner Cable. After spinning off its money-losing magazine unit, TW has become much more focused on content and distribution – exactly what Murdoch is looking for. Time Warner owns New Line Cinema, HBO, Turner Broadcasting System, The CW Television Network, Warner Bros., Kids’ WB, Cartoon Network, Boomerang, Adult Swim, CNN, DC Comics, Warner Bros. Animation, Cartoon Network Studios, Hanna-Barbera, MLB Network and Castle Rock Entertainment. In fact, altogether the company owns or controls dozens of television channels which could all soon fall into the hands of Murdoch.

A Murdoch acquisition would be the last death-blow for Ted Turner’s Turner Broadcasting System, which launched CNN, TBS, and TNT and is now a division within Time Warner. Murdoch’s Fox News Channel was launched as a conservative alternative to CNN’s perceived left-leaning reporting. A Murdoch buyout would either deliver bipartisan profits to the media mogul or allow him to shut down the network or relaunch it under the Fox News brand.

Such an acquisition would not be cheap. Time Warner is worth as estimated $62 billion.

A Murdoch buyout would be especially troublesome for those already upset with corporate media consolidation. Murdoch would end up controlling three major U.S. networks – FOX, CW, and MyNetworkTV, multiple cable news channels, dozens of local television stations in major media markets, and more cable networks than most people can count. In fact, the assembled list of Murdoch-owned media properties is enormous:

Murdoch: The next owner of CNN?

Adult Swim, Boomerang, Cartoon Network, CNN Worldwide, HLN, Inside CNN Tour & Store, TBS, TCM, TheSmokingGun.com, TNT, truTV, Turner Sports, Fox Business Network, Fox News, Star India, YES Network, Twentieth Century Fox, Fox 2000 Pictures, Fox Searchlight Pictures, Fox International Productions, Twentieth Century Fox Television, Fox Home Entertainment, Shine Group, Twentieth Century Fox Animation, The Sun, The Times, The Sunday Times, Times Literary Supplement, The Wall Street Journal, The New York Post, The Australian, The Daily Telegraph (Australia), The Sunday Telegraph (Australia), The Herald Sun, The Sunday Herald Sun, The Courier Mail, The Sunday Mail, The Advertiser, NT News, The Sunday Territorian, The Sunday Times (Australia), The Sunday Tasmanian, Mercury, Warner Bros. Pictures, Warner Bros. Pictures International, New Line Cinema, Warner Home Video, Warner Bros. Advanced Digital Services, Warner Bros. Interactive Entertainment, Warner Bros. Technical Operations, Warner Bros. Anti-Piracy Operations, Warner Bros. Television Group, Warner Bros. Television, Telepictures Productions, Warner Horizon Television, Warner Bros. Animation, Warner Bros. Domestic Television Distribution, Warner Bros. International Television Distribution, Warner Bros. International Television Production, Warner Bros. International Branded Services, Studio 2.0, The CW Television Network, DC Entertainment, Warner Bros. Theatre Ventures, HarperCollins General Books Group, HarperCollins Children’s Books Group, HarperCollins Christian Publishers, HarperCollins UK, HarperCollins Canada, HarperCollins Australia/New Zealand, HarperCollins India, FX, FXX, FXM, National Geographic Channel, Nat Geo WILD, Nat Geo Mundo, FSN, FOX Sports 1, FOX Sports 2, FOX Soccer Plus, FOX College Sports, FOX Deportes, FOX Life, Baby TV, Fox Broadcasting Company, Sky 1, Sky Atlantic, Sky Living, Sky Arts, Sky Sports, Sky Movies, Sky News, Sky Deutschland, Sky Italia, MyNetworkTV, MundoFox, FOX International Channels, Fox Sports Enterprises, HBO, HBO On Demand, HBO GO, Cinemax, Cinemax on Demand, MAX GO, HBO2, HBO Signature, HBO Family, HBO Comedy, HBO Zone, HBO Latino, More Max, Action Max, Thriller Max, 5 Star Max, Max Latino, Outer Max, Movie Max, Barron’s, MarketWatch, Factiva, Dow Jones Risk & Compliance, Dow Jones VentureSource, All Things Digital, Amplify, News America Marketing, and Storyful.

Murdoch has already shown a willingness to spend big. He has recently taken an ownership interest in the up and coming Vice Media, popular with the under 30-viewing crowd. He also spent $415 million to buy romance novel publisher Harlequin Enterprises.

But Murdoch may not be the only one shopping for a deal. The Wall Street Journal offered a shopping list:

• Small cable network owners: Nobody just owns three or four cable networks these days. Content conglomerates like CBS, Disney, Time Warner and Comcast own 15, 30, or even 40 different channels. Smaller players are ripe for the picking. Chief among them include Scripps Networks Interactive (Food Network, HGTV), AMC Networks (AMC, IFC, Sundance), and Crown Media (Hallmark).
• Small studios: Owning a small Hollywood studio is quaint, but Wall Street investment bankers think the time is long past to sell out to larger corporate entities who can better leverage distribution of their releases, easy enough if you own your own theater chain, pay cable network, broadcast stations, and basic cable outlets.

Both phone companies are attending Sun Valley for the first time.

In addition to buyout offers from the largest networks around, Discovery Networks is also in the mood to grow larger at the urging of its board of directors, which includes Dr. John Malone, CEO of Liberty Global. Malone is behind much of the cheerleading to consolidate the cable industry and helped spark the Comcast-Time Warner Cable deal when his partly owned Charter Communications sought a takeover of Time Warner Cable itself.

Wall Street bankers love even better the idea of selling Discovery to a new owner – Disney.

For the first time, phone companies AT&T and Verizon are also in attendance at Sun Valley, and analysts don’t believe the CEOs are there for summer vacation.

Jimmy Schaeffler, chairman of media and telecom consulting firm Carmel Group, says Verizon has been most lacking in the content ownership department and “needs something else right now” as rivals bulk up. AT&T’s acquisition of DirecTV only underlines that sentiment among many Wall Street analysts who think Time Warner (Entertainment) could be an option if Verizon isn’t outbid by Murdoch.

All of this shopping has caused alarm for some, including CNN’s media reporter Brian Stelter who declared, “I will eat my remote control … in fact, I will eat my copy of the New York Post … if Murdoch becomes the owner of CNN.” 

[flv]http://www.phillipdampier.com/video/WSJ Digits Media Consolidation 7-7-14.flv[/flv]

The Wall Street Journal’s ‘Digits’ explores the ongoing consolidation of media creators and distributors. This year’s media conference in Sun Valley could spark more merger deals. (5:02)