The NFL Network and Time Warner were on the hot seat Tuesday in Washington, as lawmakers at a Judiciary Committee hearing questioned both sides about a carriage dispute that heads into the 11th hour.
Legislators questioned not just the disagreement, but whether the league violated the Sherman Antitrust Act by essentially selling itself a package of eight late-season games in the first place.
The NFL Network begins a six-week run of eight games beginning Nov. 23, with no agreement in sight for approximately 15 million Time Warner Cable subs. Those customers won’t see the net’s national telecasts, though games featuring local teams will be seen on over-the-air affiliates in those markets.
Arlen Specter (R-Pa.), who reps a state with two NFL teams and called the relatively last-minute meeting, flogged the antitrust issue hardest.
Time Warner has alleged the fees requested would be more appropriate for a top-five cable net, and one that had top-tier programming such as live games all year instead of just over a six-week period.
NFL Net has countered that the desirability of live games made its fee requests reasonable, especially in light of strong football ratings and pricey packages on the broadcast nets.
Specter also questioned the agreement that allows DirecTV the exclusive right to offer all out-of-market games via its Sunday Ticket Package.
Both TWC and the NFL Network, despite disagreeing over the feasibility of carriage, agreed on one thing: Keep government out.
In his testimony, NFL exec veep Jeffrey Pash admitted negotiations were contentious, but noted smaller carriage disagreements in the past were settled privately. “These disputes are generally resolved because one or both parties reassess and modify their positions. They do not raise antitrust issues and do not require intervention of the Congress.”
And Time Warner, fearful of opening a Pandora’s box of regulation, advised against intervention as well. “The government should leave the solutions to the marketplace,” exec Landell Hobbs testified.
Dispute threatens to take a fight over cable rates nationwide if games are unavailable beginning Thanksgiving night.
NFL Network already has aired ads promoting its barbed Web site “I Want NFLNetwork.com.” Site features a section called “Get Real, Time Warner,” that notes how “subscribers will miss a large number of live or delayed nationally televised NFL games without NFL Network,” including fans in nearby cities who are not eligible for over-the-air broadcasts, like Packers fans in Madison, Wis.
NFL Network execs have said privately they’re happy to play a waiting game, letting calls to Time Warner Cable mount before the day of the first telecast approaches.
Time Warner Cable is crafting its own message, and has fired back by saying it would be forced to raise customer rates if it agreed to NFL Network carriage fees.
It also says the NFL Network strategy isn’t working. “Despite all this avalanche of publicity, we have not seen any significant defection from our customers,” spokesman Mark Harrad said.
A similar carriage dispute is the subject of a lawsuit in New York state by NFL Network against Comcast. NFL Network already has a deal with Comcast, but has been mired in a dispute over whether terms of its old deal apply to new cable systems recently acquired from Adelphia and Time Warner.
Comcast carries the NFL Network on a sports tier, which only 20% to 30% of its customers pay for, and says it is entitled to the same arrangement for its new systems. NFL claims the new systems need a new contract and wants them to carry the network on basic cable.
Cablevision is the other major system that has not yet worked out a carriage agreement with the NFL net.