SBJ/March 26 - April 1, 2007/SBJ In Depth

Battle still looms over Extra Innings

MLB’s Extra Innings out-of-market package not long ago existed as a lightly regarded piece of the sport’s broadcast platform. Now it stands at a key intersection in baseball’s relationship with its fans and congressional leaders, the fight for subscribers between cable and satellite, and the blurring of lines between TV and the Internet.

If Barry Bonds promises to be baseball’s biggest in-season drama, Extra Innings easily represented the sport’s dominant skirmish over the winter, with the battle still far from over.

MLB and DirecTV announced on March 8 a seven-year, $700 million accord that will extend the satellite carrier’s hold on Extra Innings and calls for a 2009 launch of a long-discussed MLB Channel on DirecTV’s basic tier. The deal generated a massive outcry from cable operators, satellite rival Dish Network and legions of individual fans. MLB, seeking to mollify that criticism, is allowing Dish and In Demand, a consortium of leading cable operators, until Saturday to match DirecTV’s financial and distribution terms, an offer seen as unlikely to be met. Without a deal with those entities, DirecTV will have the out-of-market package and channel exclusively.

The ongoing conflict will hit another peak Tuesday when the Senate Commerce Committee holds a hearing in Washington to examine the MLB-DirecTV deal. Sen. John Kerry, a Massachusetts Democrat, has criticized the deal and what he says are inherent limitations within it to stifle consumer choice.

Nearly 3,000 miles west in Los Angeles, DirecTV officials are busily prepping an entirely new look to Extra Innings, one designed to resemble the carrier’s popular NFL Sunday Ticket package.

The stock-in-trade for Extra Innings, of course, will be delivering out-of-market games to viewers who want to follow teams from other cities. On that front, the service will be hamstrung with fewer blackouts this year. That’s mainly due to ESPN televising fewer games this season.

But Eric Shanks, DirecTV executive vice president of entertainment, is expecting a new Strike Zone channel to be the most popular part of Extra Innings. The new destination will be patterned after Sunday Ticket’s Red Zone channel, where viewers will be able to get live views of any game with developing action.

The Strike Zone channel remains in development just days from the April 2 Opening Day, with DirecTV still trying to determine how many nights to run it, who will staff it and how long the game cut-aways should be. “It’s a hugely expensive undertaking,” Shanks said.

It’s likely the channel will operate five days per week, with breaks for Mondays and Thursdays. Those are generally travel days with far fewer games scheduled. Also at issue is finding an adequate host for Strike Zone; Shanks credits Red Zone host Andrew Siciliano for making that offering as popular as it is.

DirecTV also is developing advanced features for Extra Innings such as sortable statistics, game summaries and score alerts, elements that debuted last season on the YES Network’s interactive coverage with DirecTV of New York Yankees games.

In total, DirecTV is selling the Extra Innings package for $160 for the season. A SuperFan package including the Strike Zone channel, some high-definition game feeds and a channel for multigame viewing carries an additional charge of $39.

“We expect DirecTV to deliver a much more robust product than what’s been available,” said Tim Brosnan, MLB executive vice president for business. “People are familiar with what they’ve done, and they’ll have a very customer-friendly package in this instance as well.”

These types of sports packages have been a boon to DirecTV, which cannot sell the type of integrated communications packages that are the lifeblood to cable operators. NFL Sunday Ticket, which is exclusive to the carrier, has about 2 million subscribers. And NASCAR HotPass saw its subscriber numbers more than triple this season, its first year of exclusive carriage of the property, to nearly 100,000. Extra Innings last year garnered about 650,000 subscribers.

“When we do sports, we go all in,” Shanks said. “I think the leagues realize that.”

A more unknown element in the out-of-market saga is the impact upon MLB Advanced Media’s corresponding product, MLB.TV. Baseball’s interactive arm this year is rolling out two tiers of service for online out-of-market games, a base-level $89.95 package for the entire season and a premium-level offering for $119.95, with its own multigame viewing platform and a higher picture resolution.

MLBAM generated about 300,000 subscribers to its own offering in 2006. This year should bring both organic growth, as well as some cable subscribers who refuse to switch to satellite, assuming DirecTV maintains an exclusive hold on Extra Innings.

But MLBAM could also benefit from a cable counteroffensive as Cox Communications last week began offering free MLB.TV subscriptions to its customers who bought Extra Innings last year.

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