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SBJ/December 10-16, 2012/Media
Big Ten might keep newest schools off net
Published December 10, 2012, Page 1
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Maryland and Rutgers face the possibility of having at least two football games and at least 15 basketball games go untelevised locally when they join the conference in a year and a half.
That’s because the Big Ten Conference is looking into a strategy that could keep all Maryland and Rutgers games — encompassing all sports — off of the Big Ten Network unless local distributors place the channel on an expanded basic tier. The Big Ten used that strategy successfully in Nebraska last year when the Cornhuskers joined the conference, and the conference is expected to use it again in 2014 when Maryland and Rutgers join.
That means Terps and Scarlet Knights fans should brace themselves for distribution battles with some of the country’s biggest cable operators just before the 2014 football season opens.
Comcast is the dominant cable operator in the Washington, D.C., and Baltimore markets, and carries the Big Ten Network on its sports and entertainment tier. In New Jersey, Comcast and Cablevision carry the channel on a higher-priced sports tier.
But the school administrations and conference officials do not want to place any live games on sports tiers in the Big Ten’s home markets. If the Big Ten Conference opted to sell Maryland and Rutgers games to the Big Ten Network from the beginning, Cablevision, Comcast and Time Warner Cable would have no incentive to move the network off of their sports tiers. Instead, if the Big Ten Network is unable to reach a deal with the distributors, local Maryland and Rutgers fans only would have access to ESPN-produced games.
The Big Ten Network is 51 percent owned by Fox and 49 percent owned by the Big Ten Conference.
The most likely scenario would have the conference selling Maryland and Rutgers games to the Big Ten Network once the channel’s distribution hits a specific percentage of the home markets, most likely around 70 percent.
The Big Ten did not have to employ this strategy in Nebraska last year, when the state’s biggest cable operators, including Time Warner Cable and Charter, cut deals for the Big Ten Network weeks before Nebraska was scheduled to open the season. But the conference was prepared to keep Nebraska’s football games out of the market if those deals were not made.
If only one distributor in Nebraska agreed to make the switch, the conference would provide games for that distributor to carry on a locally originated channel, sources said. The conference planned to sell rights to stations in the markets of Nebraska’s opponents. If Nebraska played Iowa, for example, the Big Ten Conference would sell the game to a local channel in Iowa, not in Nebraska.
The conference has not made any decisions on how it would proceed in Maryland and New Jersey. But sources say it is likely to use a similar blueprint that it used in Nebraska.
The switch to move the Big Ten Network off of sports tiers in Maryland and New Jersey will cost distributors. Currently, the network costs around 15 cents per subscriber per month outside of the Big Ten’s core market. Inside the conference’s core market, though, the price jumps to around 80 cents.
It’s unclear when the five-year-old Big Ten Network’s current carriage deals expire. But the network will have to try to convince some distributors to open up their deals early, which won’t be easy.
When the conference adds two schools, it triggers a clause that allows it to open its media rights contracts with ESPN and the Big Ten Network to account for the new schools. The Big Ten Network will use similar reasoning to open its contracts with cable and satellite operators. By adding local schools, the channel should re-set license fees.
It’s unusual for cable and satellite operators to open affiliate deals before they expire. The Big Ten is expecting the leverage of live, local games will convince them to do so.