NEW YORK — The National Basketball Assn. has granted exclusive satellite distribution for its out-of-market games over the next three years to DirecTV, and DirecTV’s main competitor, EchoStar, is hopping mad.
Michael Schwimmer, VP of programming for EchoStar, said, “The NBA has performed a disservice to the American public by not making League Pass available to our subscribers.”
EchoStar talked to the NBA about doing a deal similar to that made with DirecTV. But the NBA “decided to take DirecTV’s money and leave other satellite customers in the dust,” Schwimmer said.
In response, Rich Goldberg, VP of program acquisitions for DirecTV, said that Schwimmer is being “disingenuous” because EchoStar did not feel the need to buy the NBA League Pass between the 1994-95 and 1998-99 seasons, when DirecTV did not own exclusive satellite rights to these out-of-market games.
Subscriber base soared
Schwimmer acknowledged that EchoStar’s subscriber base has soared in the last couple of years despite the fact that it doesn’t carry out-of-market games.
“We didn’t need the NBA to make us the fastest-growing pay TV service in the U.S.,” he said.
But now that EchoStar has upgraded its technology to make it easier to adhere to the blackout rules of the various professional sports leagues, one source said EchoStar may start ruing the day it didn’t try to keep DirecTV from securing a three-year lock on the NBA.
Schwimmer also claimed that the NBA is extracting more than 60% of the $169 retail price each satellite household will have to pay for the NBA League Pass (compared to a roughly 50/50 split for movies and most pay-per-view events). At that price, Schwimmer said, “the NBA is a huge loss leader for DirecTV, which will end up raising its price to all of its customers, even ones who don’t care about sports.”
DirecTV defends record
While declining to talk about the financial terms of the deal, Goldberg pooh-poohed Schwimmer’s charge.
“Just look at our track record,” he said. “Since 1994, we haven’t increased the retail price of our two most popular packages, Select Choice and Total Choice. And we’ve added a number of networks to these packages,” which DirecTV secured by shelling out monthly license fees.
The NBA also said it has struck its first cable deal for the League Pass, signing a three-year contract with Viewer’s Choice, the dominant distributor of pay-per-view movies and events in the U.S.
The Viewer’s Choice deal kicks off with the 1999-2000 season, but League Pass will reach only the 1 million Viewer’s Choice households (out of 37 million total) that are wired for digital TV. Most observers believe this deal will have little impact until cable starts ramping up its installation of digital technology throughout the U.S.