One Of Donald Trumps Favorite TV Channels, Newsmax, Gets DirecTV Carriage Again

Newsmax, which was dropped by DirecTV with much fanfare on 01/25, is back on the air on the satellite service DirecTV as well as DIRECTV Stream and telco U-Verse. DirecTV said it will air the right-wing news channel “at no additional cost to customers,” which Next TV reporter Daniel Frankel from Next TV wrote that this implied that Newsmax wasn’t able to get the carriage fee of around $1/subscriber/year that it had been seeking in January after being on DirecTV for free for almost a decade.

This makes sense. In recent years cord cutting (dropping your cable or satellite service) and cord shaving (subscribing to a cheaper package) have made it difficult for multichannel operators to make a profit on video. This has switched their focus to broadband and other more profitable business lines.

Therefore getting any type of significant license fee increase for an independent channel has been next to impossible, and going from free to paid is a non-starter for most multichannel operators, even if the channel has the Trump glow around it.

A spokesman for Newsmax released a statement that “This report again demonstrates that Daniel Frankel continues his leftwing bias against Newsmax by making false claims about us and our carriage agreement with DirecTV.” However, Newsmax didn’t say what specifically in the article was inaccurate.

This, unfortunately, is typical. I have covered the cable network segment for over 30 years and it’s common to have cable network executives complain that estimates are wrong, but they refuse to say if they are too high or too low. Without any feedback directionally, it’s difficult to change estimates and projections.

There are a number of significant issues surrounding this carriage deal. This development is important to Donald Trump’s presidential campaign, as Trump repeatedly complained about Fox News coverage of him not being favorable enough during his time in office (Newsmax founder Chris Ruddy is described as a friend and ally by Politico). In retaliation, he would often put on Newsmax or One America News Network (OANN), another conservative news channel, on a big screen TV behind him as he gave press briefings.

It’s also significant to Fox News. I wrote an article a little over a week ago talking about all of the interesting tidbits coming out during court filings and hearings regarding Dominion Voting Systems $1.6 billion defamation suit against Fox News.

One of the facts coming out in the pre-trial discovery was that executives at Fox News were extremely intimidated by Newsmax despite its small size. This was due not only due to the fact that then President Trump was giving them so much free publicity while bad-mouthing Fox News, but that there were rumors that Trump allies might take a significant stake in the mid-sized news channel.

In fact, there is no way that Newsmax could make a serious negative financial impact on Fox News due to the fact that multichannel operators are locked into contracts with Fox News which gives them a huge advantage over any competitor—even CNN.

Fox News gets a license fee of $2.33/subscriber per month, almost $28/year, while Newsmax is a free channel. Fox News brings in over $2 billion a year in affiliate revenue from multichannel operators versus 0 for Newsmax, according to S&P Global Market Intelligence.

Comparing CNN with Fox News, CNN’s estimated license fee per subscriber per month in 2023 is only $1.15, 48% of Fox News at $2.42. And those rates are wholesale. Consumers pay over $3/sub/month for Fox News after their mark-up to retail. Although clearly Newsmax might be able to take a bite out of Fox News’ ad revenue, some advertisers could be turned off with the tone of some of the Newsmax newscasts.

Vanity Fair last week reported that “Delaware Superior Court Judge Eric Davis appeared skeptical of Fox News’ Claim that it was only neutrally reporting on newsworthy claims by a sitting president around the 2020 election.” He ordered the case to trial, which will begin next month.

Judge Davis suggested that Fox News host Maria Bartiromo misled viewers when “she made it sound like she had no knowledge, one way or the other,” if claims about Dominion were true in November of 2020. This, despite the fact that at this point she had already been told the claims about Dominion’s machines vote-rigging were not true.

This has opened another can of worms as a Fox News producer Abby Grossberg, who has worked with hosts Maria Bartiromo and Tucker Carlson, filed lawsuits against the company in both Delaware and New York, which accuses Fox lawyers of coercing her into giving misleading testimony in the Dominion Voting Systems versus Fox News case.

She claims that herself and Maria Bartiromo were so understaffed they couldn’t properly vet the truthfulness of claims made against Dominion on the air. Fox responded with their own lawsuit against Ms. Grossberg, seeking to enjoin her from filing claims which would disclose her discussions with company lawyers.

Grossberg has since been fired after she “improperly disclosed information regarding the Dominion/Fox lawsuit that the Company purportedly believed was privileged,” according to Fox.

Grossberg now says she is willing to testify against Fox News in the Dominion Voting Systems case and has submitted an “errata sheet” which is a court filing to formally correct mistakes or inaccuracies in prior filings or testimony. One change she is asking for to her September 2022 deposition is that when asked if she trusts the Fox producers that she worked with, she wants to change her answer from no to, ”No, I don’t trust all of [the] producers at Fox” because “they’re activists, not journalists, and impose their political agendas on the programming.”

Although Fox News could certainly afford a $1.6 billion judgement—the channel generates about $1.8 billion in cash flow per year—it would certainly be a huge financial issue (although insurance will likely cover part of it) but, more importantly, tarnish the brand name that Fox News has worked so hard to develop.

Although Dominion has a high legal bar to prove its case against Fox, comments by the judge show that they certainly have a shot at winning. According to The Wall Street Journal, Dominion told Fox more than 3,600 times that the election claims from Trump allies were false, and the network system to fact check (known as the brain room) determined the allegations weren’t true ahead of nearly all of the broadcasts when these claims were aired.

“If I go to the brain room, and they say we fact-checked this and it’s not true and I go on and report it, I can avail myself of neutral reportage, even if it’s not true? How can that be neutral?” Judge Davis asked. We will have to wait until the trial in April to get answers to questions like this.