SBJ/October 1 - 7, 2007/This Weeks News

NHL set to roll out U.S. network

The launch of the NHL’s long-planned U.S. network is imminent, as carriage deals with the largest cable and satellite operators are virtually complete.

A deal with cable operators would place the NHL Network on sports tiers, according to cable executives close to the negotiations. That means the network would be available to an undetermined number of subscribers as soon as this week for the start of the hockey season.

The biggest cable and satellite providers already started offering the current season of the NHL’s out-of-market package, NHL Center Ice, last week, with an early bird price of $149 through Oct. 9 for a full season. Afterward, it will be available for $169.

Center Ice has been available to both cable and satellite operators for the past several years, and this year’s deal is good news for the NHL Network, since the NHL has been looking to follow Major League Baseball’s model by tying carriage of its channel to carriage of its out-of-market package.

Sources with the three biggest cable operators, Comcast, Time Warner and Cox, as well as satellite operator DirecTV say they are still negotiating to carry the network, and expect to complete a deal soon. EchoStar wasn’t available for comment, though it appears likely that Dish Network is close to a deal, as well, since its customer service representatives were selling the NHL Center Ice package last week.

Putting the NHL Network on a sports tier would follow a similar strategy to NBA TV, which accepted digital sports tier carriage several years ago. The NBA recently has been expressing disappointment about the lack of cable subscribers that get sports tiers. NBA TV is in less than 10 million homes.

To combat these poor penetration rates, NHL Network plans to make much of its programming available on demand, including some live programming and archived content. That would give all digital cable subscribers access to NHL Network content.

In some markets where hockey is less popular, the NHL is considering forgoing a linear channel in favor of a straight video-on-demand feed, cable sources said.

It’s not known how many subscribers the network will have initially. The network is charging cable and satellite operators 21 cents per subscriber, though that price fluctuates given the different markets and carriage commitments.

The network will be virtually identical to the already-established NHL Network in Canada, which has been operating for the past six years out of Toronto and is seen in 900,000 Canadian pay TV homes. The U.S. version of the NHL Network will feature 50 live games this season, many of which will be different from its Canadian counterpart. It also will show the Canadian network’s signature program, “On the Fly,” which offers news, commentary and live look-ins to NHL games.

Eventually it will morph into more of a U.S. channel, with an undetermined amount of programming being produced in the U.S. out of the league’s New York office. Jody Shapiro, group vice president of Center Ice and the NHL Network, will head up the network. Shapiro is the one handling carriage negotiations for the channel.

“We can launch quickly because of how developed the network is in Canada,” said NHL Commissioner Gary Bettman. “We can light it up in a matter of days, if needed.”

As for the NHL’s other TV issue, sources say the league has not spoken with ESPN about a media deal with the Disney company since mid-July (SBJ, July 30). Both the NHL and ESPN say the lack of talks does not mean that interest has cooled, as both sides say they expect talks to resume in the coming weeks, though neither party feels a sense of urgency about these talks.

ESPN executives believe that packages could be available for the 2008-09 season. One is NBC’s nine-game regular-season schedule plus the playoffs. NBC, however, holds an option on that, and hockey officials are saying they would like to keep their games on the network.

ESPN does not plan to offer time on its ABC broadcast network in any negotiations, network sources said.

The other package involves games that are not currently televised that the league would carve out for ESPN. The problem with this idea, however, is that Versus holds cable exclusivity to all of the league’s games through 2011, thanks to the $70 million deal it signed last year.

Versus would be willing to waive exclusivity for the NBC package, but not for a new package of games.

Staff writer Terry Lefton contributed to this story.

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