LOS ANGELES (AP) - Satellite TV operator Dish Network Corp. said Friday that News Corp.'s Fox television unit cut its access to 19 regional sports networks, FX and the National Geographic Channel after Dish refused to pay for a rate increase of more than 50 percent.
In a related development, Dish also stopped carrying MSG and MSG Plus, affecting New York-area sports fans, saying it refused to accept a "double digit" percentage rate hike proposal linked to carrying MSG sister channel Fuse, which it called a "low-rated music video channel."
Dish, controlled by billionaire Charlie Ergen, called Fox's rate hike demand "unprecedented" and said it was driven by what Fox has paid for the right to exclusive TV coverage of sports in local markets. Their multiyear deal expired at midnight Thursday.
The dispute means that a portion of Dish's more than 14.3 million subscribers will be unable to watch early season hockey games while the fight continues. New York-area Dish subscribers of MSG and MSG Plus could also miss out on live hockey games of the Rangers, Islanders, Devils and Sabres starting next week.
"I can't continue financing their war chest to keep on buying these rights," said Dave Shull, Dish's senior vice president of programming. Passing on programming-cost increases to its subscribers would go against the company's main selling point, he said.
"Having the best price for pay TV is a core part of our DNA," he said. "That's a critical part of our message to subscribers and we have to be able to maintain that."
Fox spokesman Scott Grogin said Dish's claim about its demands was "absurd," and said the fee demands were "consistent with our agreements with hundreds of other cable and satellite providers."
Barry Watkins, spokesman for Madison Square Garden Inc., which owns the MSG channels, said its proposal was for "modest rate increases that are in line with what every other operator pays." He added that Fuse was important to attracting major artists to perform at Madison Square Garden, and was carried in 65 million homes before the Dish dispute.
Dish, Fox and Madison Square Garden all said they were open to negotiations.
While the standoff continues, Dish said it will make the NFL Network, NBA TV, ESPN Classic and other pay channels available at no extra charge to those affected by the blackout.
The fee fights foreshadowed other tough dealmaking, with Fox about to negotiate with Dish on signals it retransmits from Fox TV stations when their existing deal expires on Oct. 31. Fox also has a broadcast TV station deal with Cablevision Systems Corp. expiring on Oct. 15.