The niche cable sports networks coming on line in the next few months are getting, at best, a cautious response from cable operators, who say they're not sure whether the new channels will drive subscription revenue.
The Tennis Channel, which has targeted a December launch, has not announced any distribution deals since June, when Time Warner said it would put the channel on a sports tier. The National Cable Television Cooperative agreed on a price for the channel, but none of its members have announced plans to carry it.
College Sports Television also has not announced new distribution deals. The NBA, meanwhile, has barely tried to get traditional distribution deals for NBA TV, which relaunches with live games in February. Instead the league is linking its NBA TV deals to larger programming agreements that encompass the NBA League Pass out-of-market service.
With cable stocks taking a beating on Wall Street, operators are asking tough questions of all new programmers.
"Because we are so cost-conscious now," said Bob Wilson, vice president of programming at Cox Communications, "the measure is 'does it help us retain customers and gain new subscribers?' Just because [a new channel can] get viewership doesn't mean it's going to get you new subscribers."
Wilson said Cox has not ruled out carrying any of the new channels and is in discussions with them now, but is in no hurry to get a deal done.
"There's no risk in waiting," he said.
The new NBA TV will likely be offered to cable operators through In Demand, the pay-per-view service owned by the major cable companies. But if the NBA gets its asking price, the channel will carry a fee of 25 cents a month per subscriber, nearly twice what operators pay for successful niche channels like Outdoor Life Network and Speed Channel.
"I think it's a high price," Wilson said. "There's lots of basketball on cable already."
He indicated Cox would be open to putting NBA TV on its sports tier, to which more than 60 percent of its digital customers subscribe. But, he said, the NBA may not agree to that.
"I think for it to work for the NBA, it has to have broader distribution," he said. "I think there are a number of companies that would like to put it on sports tiers, but that business model has a tough time working on a tier basis."
GOLF ADVERTISING UP IN AIR: In an otherwise strong advertising economy, the 2003 golf market remains a question mark. Things won't start really moving until later this month, but buyers note half a dozen PGA Tour stop title sponsorships haven't been sold. Title and other official sponsors account for about 50 percent of tour television advertising.
Tour Commissioner Tim Finchem said that next year, the first under a new TV contract, the tour will be fully sponsored, either through title deals or collections of local companies. Until the networks see that money, however, no one is sure how strong the market will be.
Last year the networks struggled with a drop in dollars from financial institutions, core advertisers for golf, and had mixed results getting dollars from golf equipment manufacturers.
FOX NASCAR PRICES GOING UP: Fox has told the advertising community that it plans to be very aggressive in pricing next year's NASCAR package, buyers said. They expect that to mean Fox will ask for up to a 10 percent increase on a cost-per-thousand basis. Formal presentations to buyers begin later in the month.
Fox was flat this past year with a 5.8 average rating for NASCAR, but with NBC ratings up double digits and the advertising market strong, plus some sports ad dollars freed up because there are fewer NBA games on network television, the climate has never been better for Fox to maximize NASCAR ad sales.
Still, several buyers said they don't think Fox will command close to double-digit increases, with prices likely settling in at mid-single-digit increases.
A smattering of early renewals for Fox's NASCAR package already came in at that level, buyers said.
Andy Bernstein can be reached at abernstein@sportsbusinessjournal.com.
