How Newsmax’s Cable-Fee Fight Spiraled Into the Right’s Latest “Censorship” Crusade

“Deplatforming conservative media is a threat to our freedoms,” wrote Van Susteren, a former Fox News host who was hired last year by Newsmax, the upstart conservative cable news network. Her tweet seemingly came out of nowhere. One America News, or OAN, the far-right, pro-Trump network, had been dropped by DirecTV last spring, causing a minor stir among Republicans and conservatives. The network filed a lawsuit against the satellite television provider, much of which was later thrown out, and Donald Trump called for boycotts, but the controversy––like OAN itself––had largely faded into obscurity. Van Susteren, for her part, had only previously mentioned DirecTV on Twitter when complaining about her inability to watch the Green Bay Packers.   

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But Van Susteren’s call for a congressional inquiry was a harbinger of a coming fight––and perhaps a warning shot to DirecTV, which at the time was locked in negotiations with Newsmax over a new carriage deal. After months of talks, the two sides remained at an impasse. 

Newsmax, which enjoyed a meteoric rise at the chaotic end of the Trump presidency before falling to earth as Joe Biden’s presidency got underway, sought a carriage fee from DirecTV in order to keep the network in its lineup. DirecTV has balked at that proposal, saying the costs would be passed down to its subscribers, a small percentage of whom watch Newsmax.

Those negotiations hadn’t yet spilled into public view, but Van Susteren’s boss, Newsmax CEO Chris Ruddy, a well-connected political operator and close associate of Trump, was already mobilizing his allies in Washington behind the scenes. On January 13, the network sent a memo to Republicans in Congress spelling out the network’s arguments against DirecTV, which he said is paying “hefty fees” to broadcast 11 liberal cable news channels on its service. A week later, more than 40 Republicans in the House of Representatives, including Elise Stefanik, the third-ranking GOP member, sent a letter to the CEO of DirecTV, as well as the top executives at AT&T and TPG Capital, which own 70% and 30% of DirecTV, respectively. 

“It is our understanding that DIRECTV – still majority-owned by AT&T and minority-owned and managed by TPG Capital – is moving to de-platform NEWSMAX by denying it cable fees on a fair and equitable basis,” the representatives said in the letter, which included some of the same talking points that had been circulated by the network. 

Such disputes between networks and carriers are common in the television industry, but they are often confined to only the most arcane arenas, typically unfolding in boardrooms and trade publications. Last month, YouTube TV dropped MLB Network after the two sides were unable to reach a carriage agreement. And Newsmax itself has had plenty of tussles with carriers, including in 2016, when it was dropped by DirecTV before returning the following year.  

But in early 2023, Newsmax is wielding real clout among a newly empowered Republican Party fixated on allegations of deplatforming and censorship, recently using its majority in the House to spend a day probing Twitter’s 2020 decision to briefly block users from sharing a New York Post story about Hunter Biden’s laptop. A dustup between a cable network and distributor is suddenly rocket fuel for partisan warfare. 

With neither side able to strike a deal before the deadline on January 24, DirecTV dropped Newsmax from its lineup––and the network’s boosters have been going to the mattresses ever since. Trump called it a “disgusting move” and vowed to end “all association” with AT&T and DirecTV. A week after Newsmax was dropped, 18 Republicans took to the floor of the House of Representatives to rail against DirecTV, characterizing a garden-variety carriage dispute as something far more dystopian. 

“We have seen this kind of censorship in Saudi Arabia, communist China, and Soviet Russia,” Representative Ken Buck said in a floor speech. “We never want to see it in America.” While four Republican senators, including Ted Cruz and Lindsey Graham, sent their own letter demanding answers from DirecTV.

During a Friday appearance on Newsmax, House Oversight Committee Chair James Comer, who floated the idea of holding hearings last month, turned up the heat on DirecTV and AT&T executives. “If anyone has ever watched the House Oversight Committee, any of our first three hearings, they have to ask themselves, Do you really want to go in front of the House Oversight Committee?” asked Comer, noting that “we’re all huge fans of Newsmax.” Comer said he’s been in communication with DirecTV and AT&T executive leadership and urged them to meet with Ruddy “to get this worked out—or else.”

Cruz also took up the Newsmax cause Friday on the network. “I’m going to keep pressing them and pressing them hard,” Cruz said of DirecTV. “My objective is for Newsmax to be back on DirecTV. Millions of Texans enjoy watching Newsmax and I think viewers ought to have a choice. We’ve seen too many players in corporate America give in to censorship, give in to the left saying, ‘Silence voices we don’t like.’” Ruddy promoted the Cruz clip on Twitter, adding, “Ted Cruz opposes censorship.”

Newsmax has covered the dispute relentlessly, hammering DirecTV on-air as hosts like Van Susteren have made telethon-style appeals for viewers to call DirecTV directly. DirecTV, Van Susteren recently tweeted, “should stop playing politics.” Van Susteren and fellow Newsmax host Eric Bolling, also formerly of Fox News, have called out their one-time employer for largely ignoring the story. “If Fox thinks that they’re not going to eventually become a target, they’re out of their mind,” Bolling told me.

DirecTV, meanwhile, can’t make it any clearer: it’s just business. “We had to make a difficult and necessary business decision,” said Rob Thun, the chief content officer at DirecTV. “It was in no way about ideology or political bias or deplatforming or censorship. It was purely about economics.”

Newsmax has insisted that it is only seeking a modest fee of fewer than 10 cents a subscriber per month, but DirecTV says that it would amount to “tens of millions of dollars.” The company, which laid off about 10% of its management workforce last month, has argued that it can’t justify paying a fee for Newsmax at a time when the industry is facing headwinds from cord-cutting and rising programming costs. “We didn’t think the fees they are seeking are in line with the value our customers get from the service, and part of that is informed by the viewership on our platforms,” Thun said. 

While positioned on the right, Ruddy is more businessman than pure partisan. A leading Bill Clinton antagonist in the 1990s, Ruddy later befriended the former Democratic president and even donated to his foundation. His commitment to ideological causes appears commensurate with his own financial ends. And in the dispute with DirecTV, Ruddy’s primary concern is surely preserving his business––not protecting conservative speech. It’s just not clear all the political bluster will help him get what he wants from the cable giant. 

A month later, Ruddy’s network is still off DirecTV, which wasted little time in replacing Newsmax on the dial with another conservative news channel. And there are signs that DirecTV’s patience is wearing thin; the company said earlier this month it was “troubling that Newsmax is using its news/editorial platform to publish inaccurate and misleading information regarding our contract dispute.”

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.” 

“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.

“If we sign an MFN with an operator it means, generally speaking, they get the same best terms of any other operators,” a Newsmax spokesperson told me. “Newsmax has been signing hundreds of operators with the same fee, and all have MFNs. DirecTV is demanding Newsmax accepts net zero fees. That means all other previous operators signed, and all in the future, based on their MFNs, go to zero as well. DirecTV’s ‘free carriage’ offer effectively ends any prospect of Newsmax getting licensing fees from any operator. DirecTV knows that.”

That’s a mouthful, especially for those not versed in TV business-speak. But essentially, Newsmax is arguing that the deal DirecTV wants the network to agree to would greatly hurt them in trying to make future agreements with other operators. As the spokesperson added, “DirecTV is seeking to demonetize Newsmax by demanding it accept zero fees, which it knows impacts all other agreements. It’s censorship by demonetization.” Or, as another source close to the situation put it to me: “They’re caught in their own contractual jail.” 

Absent a big audience or strong brand, independent networks like Newsmax have little leverage over a major provider, unlike a larger company that can bundle a suite of different channels in exchange for lucrative license fees. And if the independent network won’t accept what’s on the table, the provider can usually find one that will. Two days after it dropped Newsmax, DirecTV announced that it had reached a deal with The First, a three-year-old conservative network headlined by another former Fox News star: Bill O’Reilly. 

“When the opportunity came for [DirectTV] to seek a replacement for Newsmax, we were able to be at the right place at the right time,” said Chris Balfe, the CEO of The First. “We reached out to them. We saw the coverage of the ongoing dispute and we said, ‘Hey, we’re here if you’re looking for a free replacement.’”

The uneven playing field has made some sympathetic to Newsmax. At her confirmation hearing earlier this month, Gigi Sohn, Biden’s nominee for the Federal Communications Committee, told a Senate committee that Newsmax’s dispute with DirecTV warranted investigation, calling it an opportunity for regulators “to look at some of the practices around bundling and most-favored-nation clauses.”

But given those inherent disadvantages for independent networks, others have scratched their heads at Ruddy’s strategy. “I think that for any independent network to build a business model around a license fee after the year 2010 is a very questionable business plan,” the cable news executive told me. 

Armed with little leverage in the dispute, Ruddy is deploying what he can: his friends in politics, and his employees on-air. Newsmax has continued to shoehorn the dispute into its broadcasts, with hosts diligently putting lawmakers on the record.

“I think the whole thing is insane,” Republican representative Anthony D’Esposito said Monday on Newsmax, adding that he’s been in conversation with Ruddy “from day one” of the DirecTV dispute. “This is just another opportunity for the left-wing media to try to silence the voices of good conservative Republicans across this nation, and we are going to do everything we can to make sure it stops.” 

For Ruddy, the politicization of a standard carriage dispute is nothing new. Whether peddling Trump-election fanfic to juice ratings or claiming to be the victim of censorship to gain the upper hand in a negotiation, it is all business as usual. 

“Newsmax’s job is to make it as painful as it can be to drop them, and the card they have to play is censorship,” Balfe said. “They’re using the tools in their toolbox.”