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CABLE WANTS A PIECE OF DIRECT SATELLITE PIE
Published September 1, 1995
The latest issue of VARIETY examines the cable industry's complaints about the out-of-town sports packages available through direct satellite TV. While federal regulations prevent cable systems from making exclusive deals with single cable networks such as ESPN or CNN, all networks are offered on DBS systems, representing "potentially serious competition to cable down the road." Thus, DBS "suffers from no constraints in securing rights" to out-of-market games. While several cable operators say they would want to offer similar league packages, VARIETY's John Dempsey notes at least three reasons why pro sports leagues have "deprived cable" of their out-of-market games: 1) The broadcast networks claim that if those homes with cable could tune out of a national sports telecast and log into an out-of-market game, the Nielsen ratings might fall off so much that advertisers "would lose interest" in supporting network coverage; 2) Most cable systems "don't have anywhere near" the channel capacity that DBS does; 3) Most cable operators are not convinced that the games will offer significant revenue. Dempsey writes that by '98, when the exclusivity deal between the leagues and DBS distributors will have expired, analysts are projecting that a "majority of cable operators will be doubling and tripling their channel capacity, setting aside a dozen or more channels for pay-per-view" (VARIETY, 8/28-9/3 issue).