How Newsmax’s Cable-Fee Fight Spiraled Into the Right’s Latest “Censorship” Crusade
Now the pressure is mounting for Ruddy, who remains determined to fortify Newsmax’s bottom line through license fees. A Newsmax spokesperson told me that the network has signed “hundreds” of deals with operators who agreed to its fee, but that DirecTV’s refusal to pay jeopardizes all of that. “This is the whole ball game for them,” said one cable news executive. “If they lose this fight, it kills their license-fee business forever.”
As the outcome of the 2020 election came into focus, Fox News executives and hosts were in panic mode––not about the incoming Democratic presidency, but what they viewed as a burgeoning threat to their ratings dominance.
“The Newsmax surge is a bit troubling,” Fox News president Jay Wallace told the network’s CEO, Suzanne Scott, in a text message shortly after Election Day, according to The Washington Post. Wallace had just looked at data that showed Newsmax rising in the cable news rankings, and emerging as a viable challenger to Fox. “Trying to get everyone to comprehend we are on war footing,” Wallace told Scott. Tucker Carlson, Fox’s top-rated prime-time host, was also rattled, telling a producer in a text message that “an alternative like newsmax could be devastating to us,” according to The Washington Post.
Those private exchanges, made public earlier this month in a court filing that is part of Dominion Voting Systems’ $1.6 billion defamation lawsuit against Fox, provided a snapshot of a period when consumers of conservative media had little appetite to hear that Joe Biden won. Fox infuriated Trump and his most avid supporters when it became the first network to call Arizona for Biden, and drew even more wrath when it declared Biden the outright winner. Newsmax capitalized on that disenchantment, eagerly feeding the delusion that a Trump victory was in the offing and siphoning viewers from Fox along the way.
That coverage earned the network its own billion-dollar defamation suit, but not before it notched a historic (if fleeting) ratings win over Fox. “We would like to overtake Fox in the next 12 months, and I think that’s doable,” Ruddy said at the time.
That proved to be too optimistic, as Newsmax’s audience has plummeted since the wild post-election period. The network averaged 119,000 viewers in prime time last month, according to Nielsen, down from 206,000 the year before and 327,000 in January 2021. Its status as a budding rival to Fox News, once again firmly atop the cable news heap, now looks like a blip.
But Ruddy has always been bullish about Newsmax. In the two years following the election, he filled up Newsmax’s talent stable, hiring Bolling, Van Susteren, and James Rosen, also formerly of Fox News.
Newsmax launched as a cable channel in 2014, and like other new channels, initially paid its way onto services like Dish and DirecTV. The network is no longer paying for carriage, and in recent years, Ruddy has gotten more aggressive in his pursuit of license fees, at least in part to help offset the millions his company has poured into Newsmax’s television operation on distribution and talent. Last year, the network was dropped by the cable operator Breezeline, which said that Newsmax had sought a fee that “would have resulted in increased TV fees for all Breezeline customers.”
When signing a deal last year with Verizon, Newsmax announced that it is available in more than 100 million homes in the United States through over-the-top streaming platforms, as well as its agreements with major cable and satellite providers. DirecTV, like Breezeline before it, has resisted the idea of paying for something that can be accessed for free, although Newsmax says it plans to do away with the live stream “sometime this year,” a precondition for it to receive any license fee. But Newsmax says it won’t receive any of the fees that other operators have agreed to so long as DirecTV refuses to pay up, a result of so-called “most favored nation” clauses, MFNs, that are hallmarks of any carriage deal.