SBJ/20090406/This Week's News
Cable wary of NFL’s Red Zone Channel
Published April 6, 2009
The president from one of the country’s biggest cable operators approached a reporter last week and retold a joke that he said was making the rounds at the cable industry’s annual convention in Washington, D.C.
Question: What’s the best way for DirecTV to market its exclusive NFL Sunday Ticket service?
Answer: The Red Zone Channel.
The joke speaks volumes about the state of the NFL’s relationship with the cable industry — a relationship that has become so bad that the league’s cable offerings are now a punch line.
The joke also offers the first glimpse at how cable distributors view the NFL’s proposed Red Zone Channel, a new network the league is trying to sell to cable that provides live look-ins and real-time highlights during NFL games.
Cable still doesn’t know much about the proposed channel, but it is nearly unanimously leery about carrying it.
Last week’s Cable Show was the first time the cable industry gathered en masse since the NFL announced its $4 billion Sunday Ticket extension with DirecTV on March 23. Cable’s overwhelming response to the deal, which keeps the popular Sunday Ticket service on cable’s biggest competitor through the 2014 season, was filled with a mixture of resignation and confusion.
When it announced its Sunday Ticket deal, the NFL said it would make the Red Zone Channel available to cable operators as a stand-alone channel. Sort of a “Sunday Ticket Lite” offering, the channel would provide live look-ins and real-time highlights to the league’s Sunday afternoon games. It would be sold to cable operators as a separate channel from NFL Network.
NFL executives are hoping to use the Red Zone Channel to entice cable operators to start carrying NFL Network.
“We want both fan-friendly services available as widely as possible,” an NFL Network spokesperson said.
One problem, however, is that cable operators still don’t know anything about the Red Zone Channel. They don’t know how much it will cost. They don’t know what it will look like. They don’t know how the NFL plans to schedule the channel, or even if it will exist outside of football Sundays.
An NFL spokesperson said these questions will be answered over the next few weeks, as league executives meet with cable, satellite and telephone companies.
But cable’s initial pessimism about the proposed channel is not good news for NFL Network, which is facing the loss of about 2 million subscribers after its Comcast deal expires at the end of the month.
Most of the cable operator executives contacted by SportsBusiness Journal last week worried that the proposed channel would become a marketing vehicle for DirecTV’s service. Why just get the Red Zone Channel when you can get the entire Sunday Ticket service on DirecTV?
“It’s an interesting idea,” said Comcast Executive Vice President David Cohen. “But I don’t think that it’s a fully baked idea. And we certainly don’t know or understand exactly what the NFL wants to do with it.”
But cable’s animus with the league goes beyond the Red Zone Channel. Cable executives are upset that the league continues to sell its popular out-of-market package exclusively to DirecTV, especially when every other league sells its out-of-market package to both cable and satellite.
It’s one reason why more than one high-ranking cable exec described NFL relations — which have not been particularly good for years — as being at an all-time low.
“It’s unfortunate that this issue with the NFL Network has been taken to the level it’s been taken to,” said Bob Wilson, senior vice president of programming for Cox, one of the few big cable operators to have a deal with NFL Network.
Others aren’t shy about saying the lack of access to Sunday Ticket makes a deal for NFL Network less likely. “Our members aren’t happy about it,” said Matt Polka, president of the American Cable Association, a group of small and medium-size cable operators. “They’d like access to that programming.”
Comcast’s Cohen said that Comcast “made it crystal clear” to the NFL that it was interested in bidding for the package on a nonexclusive basis, but was rebuffed.
“They have made it quite clear in every conversation where we have brought this up that we should stop focusing on their out-of-market package because they’re not going to make it available to cable,” he said.