Vanity Fair recently reported that Fox News is actively pursuing a more aggressive strategy to increase its revenue by raising the fee paid by cable and satellite providers to $3 per subscriber. Fox aims to surpass the current mark during negotiations with providers like Comcast this spring. These fees represent Fox’s primary source of revenue, surpassing advertising, and are considerably higher than those charged by its competitors.
During a recent earnings call, Fox Corp. CEO Lachlan Murdoch announced that the network plans to increase affiliate revenue despite the cord-cutting trend that is shrinking the consumer base. He revealed that 70% of the network’s cable and satellite contracts will be up for renewal during fiscal years 2023 and 2024.
Dominion filed a lawsuit against Fox News and Fox Corp. for defamation over the network’s 2020 election coverage, which falsely claimed that the company’s election machines had been used to alter votes. The two parties settled the case, with Fox paying out $787.5 million to Dominion.
Fox News executives insist that the Big Lie scandal has not spooked sponsors, and negotiations are ongoing to renew or gear up to renew contracts with at least three major cable providers. These three renewals alone, even without increases, would be worth nearly $1 billion annually to Fox. If Fox can collect $3 per subscriber, it would earn over $1.8 billion from affiliate revenue alone.
Vanity Fair writes that the network has every incentive to ramp up its extremism to shore up the loyalty of its audience, which Fox will leverage during upcoming negotiations. Although Dominion’s lawsuit had limited impact, Fox News’ carriage fees remain the network’s ultimate weapon. Unlike most commercial TV channels, Fox News doesn’t need a single advertisement to be profitable thanks to carriage fees and the guaranteed revenue.
