TW enters the digital game

Gotham cabler creates tier for sports nets

Time Warner Cable of New York City has created its first digital tier, and early buzz centered as much on the networks that didn’t make it as the ones that did.

To start with the winners, NBA TV, which features four live pro-basketball games each week during the regular season, looks like the first among equals on the tier, which will cost digital-cable subscribers an extra $3.95 a month.

Also in the mix are the Tennis Channel; Fuel, the extreme-sports net from Fox; and three channels under the umbrella Fox Sports Digital Networks whose programming consists mainly of college basketball and football repurposed from Fox’s 22 regional sports nets throughout the U.S.

The most high-visibility networks not part of the tier are the NFL Network, College Sports TV and the Football Network.

The NFL Network’s absence may not be much of a surprise to sports mavens as the NFL has been cool toward sports tiers. A sports tier, in the NFL’s view, will take too long to get the network into enough homes to make the 30-second spots saleable on Madison Avenue.

All of these cable networks are dependent on two revenue streams: advertising dollars and license fees from cable operators.

At the least, the NFL is demanding that cable operators place its network on what it calls digital basic, meaning that as soon as customers buy the digital box, they get the NFL Network without paying anything extra.

Sources say that Football Network, which schedules games from smaller, more obscure colleges, and College Sports TV don’t have similar prohibitions against tiers. The two are still in negotiations with Time Warner and could end up joining the tier at some point down the road.

“There’s a definite incentive for Time Warner to add a greater variety of sports channels to the tier to get it into more subscribers’ homes,” said Neal Pilson, head of Pilson Communications, a sports consultancy.

Pilson said Time Warner could add more channels and keep the retail price to subscribers at $3.95 because “the company would still keep its profit margins high.”

Even if the average monthly price to Time Warner is 25¢ for each subscriber who buys the tier, the company could shoehorn eight channels into the slot and still almost double its income.

The NBA and Time Warner made the announcement at the NBA Store on Fifth Avenue. Time Warner’s local footprint covers 1.4 million subscribers in Manhattan, Queens, Staten Island, Brooklyn, Mt. Vernon and a number of counties in New Jersey and upstate New York.

Time Warner will offer NBA TV free to its subscribers between now and Nov. 19, the date that the full tier becomes available.

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