• by David Goetzl  @dgoetzl, September 13, 2006

The much-discussed News Corp. challenger to CNBC--the Fox Business Channel--is on schedule to launch early next year in 30 million homes, according to News Corp. President-COO Peter Chernin.

"We just want to make sure we have all the distribution deals locked up...and we think we're getting pretty close to doing that," Chernin said yesterday at an investors' conference.

A more pressing issue for News Corp. is renewing deals with cable and satellite operators for the Fox News Channel. Chernin said he expects negotiations over the next several months to be exceedingly contentious with deal-making going down to the wire--perhaps even leading to a blackout.

"You may see us pull the channel if we can't make a deal," he said.

Merrill Lynch analyst Jessica Reif Cohen said FNC receives 25 cents per subscriber, and is seeking $1. Chernin would only say that "we believe that we have earned the right to get a significant, significant increase."

Regarding the Fox Business Channel, about half of its initial 30 million homes are likely to be customers with DirecTV, the News Corp.-owned DBS service. News Corp. has a head start in launching new cable channels, since it can instantly give a new outlet distribution in 15.5 million DirecTV homes.

Since News Corp. acquired DirecTV three years ago, Chernin has said the company intends to use it to launch one new cable channel a year. So far, the launches have included the Fox Reality channel and Fuel. In addition to the business network, DirecTV will serve as a springboard next year for the launch of the Big Ten Channel, a joint venture between Fox and the vaunted athletic conference.

On other matters, Chernin threw cold water on speculation that DirecTV would seek a merger with EchoStar, then offered some observations on the ad market.

He described the market as "pretty good" in the U.S., but soft in the UK and Australia. While the cable market in the U.S. looked "ugly" in mid-summer, he said it has been improving.

He also said the principal issue that slowed the broadcast upfront--how to place a value on ratings reflecting DVR-aided viewership--is far from over. While sellers agreed to negotiate based solely on "live" ratings this year, Chernin said the war has only begun, and battles over how much advertisers will pay for shows viewed via DVRs will continue.

While there has been some talk that ad-zapping DVRs may drastically reduce advertisers' interest in broadcast television, Chernin said the devices will simply create a dichotomy.

"Hit shows are only going to get stronger and you're going to have more leverage and advertisers will pay whatever it takes to be on them, and marginal shows are going to become that much more marginal," he said. "No one needs to buy a fourth-place show in any given time period."