Baseball close to exclusive deal with DirecTV
All of a sudden, baseball is not Mom and apple pie any more.
The sports world is in an uproar over reports that Major League Baseball has thrown a beanball at cable TV, turning down its offer to renew Extra Innings, the league’s out-of-market package of regular-season games.
Instead, baseball is close to an exclusive deal with DirecTV, which is ready to fork over $100 million a year for a seven-year contract to carry Extra Innings, starting this season.
If that deal goes through, more than 300,000 people who paid $179 each last year to get Extra Innings either on cable or on EchoStar, DirecTV’s sole satellite competitor, will be out of luck.
Some of these people are bombarding Washington with angry calls and e-mails. The most high-profile responder to date: Sen. John Kerry (D-Mass.), who said last week that he’s going to sic the FCC on MLB.
But baseball appears willing to shrug off all of these slings and arrows, not only because of DirecTV’s $700 million license fee but because DirecTV will embrace the planned 24/7 Baseball Network, shoehorning it into the Total Choice package that goes to almost all of its 15.8 million subscribers. The Baseball Network (TBN) is still in the works, but it’s expected to open for business early in 2009.
Baseball made a similar proposal to In Demand, which put together previous Extra Innings deals for cable. To renew Extra Innings, baseball wanted full clearance of TBN, meaning a choice slot on the expanded basic tier, which would put it in front of 95% or more of cable subscribers in each system.
Baseball’s TBN-coverage requirement turned out to be a deal breaker: The days when a fledgling network could claim expanded basic on a cable system have vanished.
Just ask the NFL Network, which offers huge volumes of original programming, highlighted by eight regular-season primetime games each year. Many cable ops, including Time Warner and Charter, have rejected the NFL net’s expanded-basic demands.
Says Bob Gutkowski, CEO of Sports Marketing Intl.: “I’m not sure that reaching only 15 million people with Extra Innings and the new network is such a great business model. If you’re a good distributor, you want to get the whole world.” The most widely cleared cable networks now reach about 92.5 million cable-and-satellite homes.
“But baseball is not negotiating from a position of strength,” says Rick Gentile, professor of sports management for Seton Hall U. “Its ratings have fallen off in the last couple of years, and the last few World Series have hit record lows.”
However, Chris Bevilacqua, a partner in SPC Worldwide, a sports-marketing operation, says baseball could still climb out of its dilemma by beefing up its broadband Website.
Cable subscribers don’t have to cancel cable and buy DirecTV. Instead, Bevilacqua says that with high-speed connections, they can get all of the out-of-market games through streaming video on their computers for an annual fee of less than $100.
But what about eyestrain from watching baseball games on a small laptop screen? Have no fear, he says: “Manufacturers are working on devices that will link up the computer to your TV set wirelessly.”