Charter Calls Fox Affiliation Complaint Contrary to Cable Logic
Fox News Network's affiliation complaint against Charter Communications (see 1607200065) is a grab at "tens of millions of dollars of subscription fees to which it is not entitled as a matter of contract, industry practice, or common sense," Charter said…
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in a motion to dismiss two counts of the lawsuit. Charter's motion filed Friday in New York State Supreme Court in Manhattan closely followed arguments it made earlier this month in asking the same court to reject a similar complaint brought by Univision (see 1609060069). In its Fox motion, Charter said it paid Fox all the required fees -- though at lower, Time Warner Cable rates, since Charter's May acquisition of TWC. Fox's argument is New Charter should pay the higher, legacy Charter rates, leading to higher aggregate fees than TWC and Charter paid individually in their respective agreements before the May takeover, Charter said: "Put differently, [Fox] maintains that the deal that should set the terms for the combined New Charter is the higher-rate deal that applied to a smaller operator, with fewer customers, rather than a lower-rate deal that applied to a bigger operator, with more customers. This is nonsensical and contrary to the fundamental economic logic of the cable industry." The motion focuses on Fox's dismissal of breach of implied covenant, unjust enrichment and fraud claims. Charter said it wasn't addressing other Fox claims: that its agreement with Charter applies to all New Charter cable systems, and that New Charter breached or will breach the Charter agreement by applying the TWC terms. Charter said full development of the record will disprove those assertions. Fox counsel didn't comment Monday.