NEW YORK — In an apparent effort to deflect criticism of cable subscriber rate increases, John Malone’s Tele-Communications Inc. on Thursday excoriated the National Football League for “depriving cable customers of product” by its practice of selling a package of out-of-market NFL games — exclusively — to the satellite distributor DirecTV.
Presiding over a conference call with the press Thursday to discuss a new round of rate increases to the company’s subscribers, Bob Thomson , senior VP for communications and policy planning for TCI, delivered an unusual public diatribe against the NFL. TCI and other cable operators, Thomson said, are “disadvantaged … we want access to the same NFL packages that our competitor has.”
Thomson accused the NFL of “being afraid to give out-of-market games to cable” because these cablecasts would “diminish and discredit” the games on broadcast TV. But meanwhile, TCI has lost 70,000 subscribers in the last year, many of them “high-end customers” who buy lots of sports packages, pay TV networks and pay-per-view movies.
A spokesman for the NFL acknowledged that Fox, NBC and ABC together have paid close to $4 billion for the most recent four-year deal to carry NFL games, giving them 800-pound gorilla status. “Our goal is to make as many NFL games available for free” on over-the-air TV, the spokesman said.
While cablecasts would hurt broadcast ratings, the NFL spokesman said, “DirecTV is minimal in the overall scheme of things,” its latest subscriber count hovering in the 2.4-million range. By contrast, households in close to 70% of the country are hooked up to cable.
The context of Thomson’s attack on the NFL was TCI’s defensiveness over the bad press that cable operators, led by TCI, always invite when they raise monthly prices to subscribers.
The price hike this time will factor out to an average of 6.8%, but Thomson says that figure is 35% below what TCI could’ve taken based on the maximum price allowed by Federal regulations.
In justifying the rise in prices, Thomson says the money TCI funnels to all the cable networks carried by its systems has climbed by double digits in each of the last four years, topping out with a 21.1% jump in 1996.
But he went on to say that most of these costs were justified by “the fact that programming has become far more expensive to produce. We’re not seeing tractor pulls anymore on ESPN.”
The main problem with programming costs, Thomson said, is that just a handful of companies, led by Time Warner, Disney and Viacom, own almost all the mass-circulation cable networks. “They’re squeezing out independents like C-Span and the Weather Channel and leveraging their megaprogramming assets to get new programming services” on cable systems, even if there’s no demand from subscribers.
TCI also produced elaborate charts showing that TCI’s subscribers, on average, pay less than half the monthly subscriber fees pocketed by cable’s three main satellite competitors: DirecTV/USSB, Echostar and Prime-star.