Update September 5: Days after Newsmax filed an antitrust lawsuit against Fox, a judge dismissed it on procedural grounds. Newsmax has said it will refile the lawsuit.
“Right-leaning pay TV news,” as its purveyors refer to their products, has come into big money.
While its media-company competitors can’t seem to spin off their failing cable networks fast enough, Fox Corp. has no such plans. In fact, it just saw Fox News increase its audience 25% from April - June, according to the conglomerate’s latest earnings report. Fox attributed the performance of Fox News to an overall revenue spike of 15% for its cable networks in fiscal Q4 to $1.53 billion.
According to upstart rival Newsmax, Fox guards its hold on the right-wing news market stridently — in fact, Newsmax says too stridently. The Boca Raton, Fla.-based Newsmax just filed a lawsuit in a Florida federal court, accusing Fox of using “anticompetitive means to exclude competing providers of right-leaning video content from the market.”
Specifically, Newsmax claims, Fox tries to include “no carry” provisions in its licensing contracts preventing pay TV operators from carrying other conservative channels like Newsmax or OAN. The suit also claims that Fox tries to exact a monetary penalty on pay TV operators for carrying these rival channels.
“But for Fox’s anticompetitive behavior, Newsmax would have achieved greater pay TV distribution, seen its audience and ratings grow sooner, gained earlier ‘critical mass’ for major advertisers and become, overall, a more valuable media property,” the suit adds.
Newsmax CEO Chris Ruddy said during the company’s first-quarter earnings report in May that the channel is currently in about 60 million U.S. homes. That’s actually on par with proliferation figures published by Fox earlier this week.
Since June 20, Fox News has averaged 2.432 million viewers in Monday-Sunday primetime, making it the highest-rated network in all of television — all four major U.S. broadcast networks included. For its part, Newsmax is only the fourth biggest cable news channel, trailing not just Fox News, but CNN and MSNBC, as well.
“Newsmax cannot sue their way out of their own competitive failures in the marketplace to chase headlines simply because they can’t attract viewers,” Fox said in a statement responding to the suit.
Led by longtime right-leaning proponent Ruddy, Newsmax has been driven by a seemingly ideological bent. But lately, its business interests appear more front and center.
Newsmax’s suit comes just over a week after the programmer filed comments to the FCC, contending that the agency doesn’t have the authority to change TV station ownership limitation rules - an easing of which could allow No. 1 station owner Nexstar to realize its proposed $6.2 billion purchase Tegna.
Not only does Newsmax compete with local Nexstar channels in news, but also Nexstar’s own upstart cable news network, News Nation.
In February, Newsmax conducted successful initial public offering, raising the maximum allowed of $75 million through the sale of 7.5 million shares of Class B common stock.