The NFL Network will be offered by Charter Communications on a digital sports tier — not digital basic as was widely reported last week.
However, the cable operator is required to increase the percentage of subscribers receiving the service over the next five years. Neither the NFL nor Charter would say how many subscribers Charter guaranteed, but both indicated that the NFL Network must reach a minimum number of households in order to satisfy the NFL's terms.
How Charter goes about trying to reach that threshold is purely at its own discretion, and the company has decided to make an initial go at it by offering the channel on a sports tier.
"In the greatest majority of our markets we have service genres, and that includes a sports tier, and that's where NFL Network will generally be," said Charter spokesman Dave Mack. "Our distribution base is going to be by and large the sports tier, because that's our programming philosophy."
But NFL Network senior vice president of distribution Adam Shaw said Charter likely will have to expand distribution beyond a sports tier to meet the NFL's terms.
"At the end of the day, in order to make their commitment there's going to have to be some sort of combination that would be very similar to digital basic or a combination of analog and digital basic," he said.
He would not comment on the specifics of the agreement with Charter, which is the network's first major deal with a cable operator. But he said the league pretty much got what it was looking for in terms of distribution. "The key is them reaching thresholds that have us in front of a very significant number of eyeballs," he said. "I would not be surprised if we're in half their homes in a couple of years."
On most of its systems, Charter offers a sports tier as one of three programming packages on its digital platform, and requires all digital subscribers to select at least one of those packages. An industry-high 42 percent of Charter's 6.4 million customers receive digital service.
If 60 percent of Charter's digital homes pick the sports tier, the penetration would equal about 25 percent of Charter's total homes, or just over 1.5 million.
NFL officials have said all along that deals with such low penetration levels would not be satisfactory to the league. But they appear to have found a middle ground by allowing cable operators to ratchet up distribution over time.
"We are allowing a little bit of flexibility in terms of a ramp-up period," Shaw said.
The NFL Network reportedly is charging Charter 20 cents per subscriber per month, down from an initial 25 cents asking price.
Charter's chairman and largest shareholder, Paul Allen, also owns the Seattle Seahawks, but Shaw said his name never came up in negotiations with the company and that was not a factor in landing the agreement.
