Fox and Comcast are lobbing hand grenades at one another over a cable TV/satellite issue that never seems to go away: the runaway cost of sports networks.
The program service that has triggered the latest skirmish in this ongoing war is the Big Ten Network, 49% owned by Fox Sports. Big Ten opened for business last month, crippled in its eight-state geographical footprint by the absence of any cable systems owned by four top-10 cable operators: Comcast, Time Warner, Charter and Mediacom.
Fox made no headway earlier this year in contract talks when it asked the four cable ops to carry the channel on its desirable expanded basic tier for a strapping monthly fee of $1.10 per subscriber.
The cable ops responded instantly, telling Fox that the expanded-basic level is off limits to any standard-definition net like Big Ten, even with college football and basketball. Cable ops are hoarding expanded-basic bandwidth to accommodate the high-definition networks it needs to pick up to compete with satellite TV.
The operators offered to put Big Ten on a digital sports tier, but the proposal went nowhere, because so few people buy sports tiers that it’s hard for networks on them to attract advertisers.
The adversaries have engineered blitzkrieg marketing campaigns to get consumers on their side, highlighted by on-air spots, full-page print ads, billboards and websites.
With Fox cheerleading from the sidelines, the two satellite distributors that have bought the Big Ten Network — DirecTV (which is owned by Fox parent News Corp.) and EchoStar — are targeting customers of Comcast (and, by extension, the three other cable ops) who are Big Ten fans.
“DirecTV is the only way to really bring the Golden Gophers home,” blares a humongous add in Minneapolis newspapers. And the visuals in EchoStar’s ad in Michigan papers recently featured a football in the foreground labeled with the words “Big Ten Network” and surrounded by thunder and lightning in the background, under a headline that read: “Don’t miss your Wolverines. Get Dish Network.”
DirecTV says local satellite dealers are signing up more new customers throughout Big Ten territory than in recent months. But Comcast says it doesn’t notice any unusual rise in the number of disconnects in the eight states in which Big Ten teams are located.
Comcast has retaliated against the satellite promotional onslaught with a newspaper ad that says, in bold type: “All the biggest Big Ten games are on Comcast this season.”
The argument by Comcast and Time Warner against putting the Big Ten on expanded basic parallels their argument for not taking the NFL Network: Sports fans don’t need another sports network or two, because they get just about all of the games that are important to them right now.
ABC and ESPN have a broadcast/cable-network deal for Big Ten football, which gives ABC first dibs on each week’s most significant game. Except for three specified weeks during the season, ESPN gets the second-best game. Most weeks that leaves Big Ten with matchups that may not be must-see nationally but are still of importance to fans in the Great Lakes region.
Executives at Fox and Big Ten are convinced that, at least in part, Comcast is being stubborn, because it was really gung-ho about becoming Big Ten’s 49% partner, but lost to Fox in a bidding war. Comcast, driving hard to become a sports powerhouse, felt thwarted, particularly because its wholly owned Versus network failed in an attempt two years ago to engineer a deal with Major League Baseball.
And conspiracy theorists at the NFL Network also darkly whisper that Comcast’s intransigence gives off more than a little whiff of revenge. Comcast offered the NFL upwards of $400 million a year early in 2006 to buy eight NFL regular-season games for Versus. After lots of agonizing, the owners eventually said no, funneling the games to the NFL Network on what turned out to be the mistaken assumption that Comcast and TW would have to carry the net.
While no talks are going on between the NFL Network and the cable naysayers, Bob Thompson, president of Fox Cable Sports Networks, says he’s optimistic Big Ten may be able to work out a deal with the holdouts.
Fox has reduced the $1.10-a-month asking price, and it’s offering umbrella deals that include renewals of some other Fox-owned cable networks. Another Fox offer that has landed a few recent cable-operator deals for Big Ten is the multiple-year renewal of the Fox-owned TV stations for no license fees.
Such retransmission-consent deals are always complicated and contentious. But give cable ops the chance to lock in longer-term station renewals, and they might even decide to lease expanded-basic beachfront property to an unproven fledgling network like Big Ten.