ESPN Pushing Cable Operator Altice USA To Expand Distribution, Carry SEC/ACC Networks
ESPN is pushing cable operator Altice USA to "carry two of its college sports channels and make its flagship network more widely available as part of negotiations to renew a contract expiring at the end of the month," according to a source cited by Gerry Smith of BLOOMBERG NEWS. The negotiations are the first between ESPN and Altice since the latter "bought Cablevision Systems last year, obtaining about 2.4 million pay-TV customers" in the N.Y. area. The talks will test whether Disney "can use its leverage as owner of ESPN, ABC and the Disney Channel to make pay-TV providers carry programming that may not interest all viewers." Disney also is asking Altice to "carry the SEC Network and the new ACC Network" in the N.Y. TV market, while "seeking to have the main ESPN channel carried in a higher percentage of Altice’s subscriber homes, meaning the cable provider couldn’t sell as many packages without the network." The source said that Disney is also "pushing for higher rates for its ABC broadcast channel." If the two sides "don’t reach a deal, Altice subscribers could lose ESPN or be forced to switch" to Verizon, the "main competitor" in the N.Y. area (BLOOMBERG NEWS, 9/18). NBC NEWS' Claire Atkinson cited sources as saying that Disney is "asking for a 'gigantic' pay rise for its package of channels" (NBCNEWS.com, 9/18). Pivotal Research analyst Jeffrey Wlodarczak said that the Disney is "likely seeking 'large absolute price increases,' the carriage of new channels at an added fee (including the upcoming ACC Network) and, for the first time, increased programming carriage minimums.'" CABLEFAX's Alex Silverman notes that third factor is "extremely important given the rise of smaller bundles." As distributors "seek to offer more affordable packages, they will be inclined to leave ESPN out to reduce the cost for non-sports fans" (CABLEFAX.com, 9/19).