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June 23, 2008
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Touchdown Pass? NFL Network Discussing Partnership With ESPN

 
NFL Network is "in talks to form a partnership" with ESPN, as league execs, including NFL Network President & CEO Steve Bornstein, have held "high-level discussions" with Disney execs in recent months, according to sources cited by Schechner, Futterman & Marr in a front-page piece for the WALL STREET JOURNAL. Sources said that NFL Commissioner Roger Goodell and Disney President & CEO Robert Iger "have been involved" in the talks, and that some NFL team owners "have been briefed on the discussions." A scenario being discussed involves combining NFL Net with ESPN Classic, which "has relatively low ratings but wider distribution." SNL Kagan Senior Analyst Derek Baine said that ESPN would "broadcast eight more games per season on ESPN Classic, and then attempt to wring higher subscription fees than the [$0.16-0.17] it currently receives for the channel." Schechner, Futterman & Marr reported the potential partnership would "give an edge to ESPN over its broadcast competitors, and provide a boost in subscriber and advertising revenue for ESPN Classic." But there is "no guarantee the two sides will reach a deal," as sources indicated that "talks have been under way for some time, and an agreement doesn't appear to be imminent." If a deal is reached, it would represent a "big shift in strategy for the NFL: abandoning its effort to force cable operators into carrying its own network and thus paying it lucrative monthly fees." It also would "send a message to other professional sports, which have enjoyed rising television fees for years, that even the biggest and most powerful league in the U.S. cannot launch a new channel without the consent of giant cable operators" (WALL STREET JOURNAL, 6/21).

EXCLUSIVE TALKS? Baine said of the prospective ESPN partnership, "Obviously, you're going to have more luck getting carriage if you're Walt Disney than a league or any other independent network. If it's with Disney, NFL Network is bundled in a package with all other Disney channels, and the cable operator takes all of it or gets none of it." NFL Exec VP/Internal Affairs Joe Browne said of the report, "We speak to our TV partners all the time about all sorts of issues." But an exec with an NFL TV partner "questioned whether that's the case." The exec: "If these talks are going on, I'm surprised that the NFL would limit discussion to just one of their network partners. It's kind of mind-boggling if they are having these discussions." Another exec from the same network suggested that the "expected success" of MLB's 24-hour channel, which will launch in January in an expected 47 million cable homes, "has to give NFL owners pause" (L.A. TIMES, 6/21). In N.Y., Garrity & Lauria reported NFL Net also has spoken to NBC, Fox and CBS, "where they were going to turn ... CSTV into a joint venture" (N.Y. POST, 6/21).

COMCAST: In Philadelphia, Fernandez & King cited sources who said that Comcast would "appear to be a winner in any deal" between ESPN and NFL Net. ESPN carriage of NFL Net "wouldn't put additional pressure on Comcast to place the new network in a prime channel location on the Comcast system because it already carries ESPN." But on the "downside for Comcast and cable consumers, an NFL Network hookup with ESPN would give [ESPN] more leverage when negotiating price hikes with cable companies." Also, it is "too early to tell" whether the partnership would "definitely end battles between" NFL Net and Comcast in court and at the FCC (PHILADELPHIA INQUIRER, 6/22).

REAX: In San Antonio, Jerry Garcia wrote under the header, "R.I.P. NFL Network Perhaps?" Univ. of Oregon Warsaw Sports Marketing Center Managing Dir Paul Swangard Friday told Bloomberg News, "This is the NFL recognizing that their choice in launching this network and the tack they chose was not the right path. The whole episode gave off a little bit of an NFL bravado, a 'we can do it all ourselves and people will demand this channel'" (SAN ANTONIO EXPRESS-NEWS, 6/21).


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