SBD/Issue 103/Sports Media

MLB Rejects Last-Ditch Extra Innings Offer From Cable Reps

By Eric Fisher & John Ourand, Staff Writers, SportsBusiness Journal

MLB appears to have rebuffed a last-ditch effort by the cable industry to keep the league’s Extra Innings out-of-market TV package from going exclusively to DirecTV. MLB is expected to announce a planned seven-year, $700M deal with DirecTV as soon as next week, a senior baseball source said. Sources familiar with the negotiations said cable reps went back to MLB about a week ago and offered to match the financials of DirecTV’s bid but without the requirement of exclusivity. The cable lobby also agreed to guarantee the same amount of distribution for MLB’s planned channel, which is scheduled to launch as soon as ’09. That doesn’t necessarily mean cable would place the channel on its expanded basic tier, however. DirecTV has agreed to place the channel on its Total Choice package, which has close to 15 million subscribers and represents nearly all of the satellite carrier’s customers. MLB has been steadfast against limited tiering for the planned channel, with the placement representing a key element of the negotiations for the Extra Innings package. As a result, the most recent talks with cable officials failed to gain any significant traction, industry sources said.

INTERNAL DISSENTION? Meanwhile, baseball and TV industry chatter has been centered on several team execs beginning to express private frustration over the pending DirecTV deal and the vitriol to it seen on fan blogs and message boards. Senior MLB execs denied the presence of internal unrest over the pact, and last month, DirecTV President & CEO Chase Carey appeared before MLB owners during league meetings in Phoenix with no appearance of any detrimental effect to the pending accord. However, Padres President Sandy Alderson told the North County (CA) Times, “This deal is particularly unfortunate in San Diego. If you have satellite TV, you can’t get the Padres. Now, if you have cable, you can’t get the MLB package. And if you want both, it means adding one or the other, and it would cost quite a bit of money.” Cox Communications offers its Channel 4 San Diego, with exclusive rights to Padres games, only to cable operators. A similar situation exists in Philadelphia, with Comcast SportsNet not appearing on DirecTV in that market. Within cable circles this week, there was talk that MLB was planning to get around this type of problem by granting DirecTV the right to resell the Extra Innings package to video services offered by telephone companies Verizon and AT&T. Baseball officials could not be reached at presstime to confirm any such arrangement.

Selig Says New DirecTV Deal
Has Fans’ Interests In Mind

MORE ON EXTRA INNINGS: MLB Commissioner Bud Selig appeared on ESPN Radio’s “Mike & Mike in the Morning” Thursday, where he said of the potential DirecTV deal, “We haven’t made a deal yet. ... I’ve heard a lot of things that quite frankly aren’t true.” He added when the deal is announced he expects “people will understand that we thought all these issues out.” Selig: “There’s no doubt in my mind that you will be quite surprised at how few people are affected” (“Mike & Mike In The Morning,” ESPN Radio, 2/15).

GREAT DEBATE: USA TODAY offers a point/counterpoint debate on the deal. A USA TODAY editorial states leagues and broadcasters are “eager to squeeze every last dollar out of each deal. If DirecTV is willing to pay so much for exclusive rights that it’s worth turning away cable dollars, that’s how it goes. But [MLB] owners ... are selling out their most devoted fans for a pittance.” The deal would provide MLB $40M more annually, which would average $1.3M per team, “not even enough to sign a second-rate second baseman.” In the counterpoint, MLB Exec VP/Business Tim Brosnan writes, “Any deal for the [MLB] Extra Innings subscription package, when concluded, will in no way affect a single fan’s ability to watch games of his home club in his home market.” Brosnan noted an out-of-market package will still be available either through Extra Innings or MLB.TV. Brosnan: “We have had fair and open negotiations with cable, satellite and telephone company distributors regarding the distribution of a new MLB dedicated channel to all our fans and the continuation of the MLB Extra Innings package. ... Our goal remains to provide as much MLB programming as we can to the maximum number of viewers, and any consummated deal will reflect that” (USA TODAY, 2/16).

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DirecTV, ESPN, MLB, Media, Walt Disney

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