Baseball Rejects Cable Offer to Match DirecTV Deal (Update2)
By Erik Matuszewski
March 21 (Bloomberg) -- Major League Baseball rejected a bid by cable-television companies to retain a premium package of games, saying the offer doesn't meet demands set by the league.
The proposal by cable companies ``falls short of nearly all the material conditions,'' the league said today in a statement. Baseball said cable companies and EchoStar Communications Corp.'s Dish Network may still match a deal the league struck with satellite-TV operator DirecTV Group Inc.
The dispute threatens to cut off out-of-market baseball games, called the Extra Innings package, to as many as 75 million cable households. The league said the cable industry failed to meet demands related to carrying a new baseball channel that starts in 2009 and fee-sharing.
``We, like many, many others, question MLB's commitment to its fans by limiting distribution of both Extra Innings and the Baseball Channel,'' said Robert Jacobson, president of In Demand Networks, a programming group owned by cable operators including the two largest, Comcast Corp. and Time Warner Cable Inc.
The cable companies were given until the end of the month to match the terms of a March 8 agreement between baseball and DirecTV, which gave the nation's biggest satellite operator the right to broadcast out-of-market games for seven years.
DirecTV also received a stake in the Baseball Channel. Under pressure from lawmakers, Major League Baseball gave up an attempt to make the DirecTV deal exclusive.
Strike Out?
Extra Innings features 60 games a week. If the rival services are unable to reach a deal with baseball, fans would have to subscribe to DirecTV to continue receiving the games. DirecTV has almost 16 million subscribers.
``By rejecting this matching offer, MLB has proven it never intended for In Demand to have a fair and equal opportunity to bid for Extra Innings,'' Jacobson said in a statement. The cable proposal ``was fully responsive'' to the league, he said.
Tim Brosnan, baseball's executive vice president of business, said In Demand wasn't willing to offer the Baseball Channel to enough homes or share fees along the lines sought by the league.
``We made them an offer that wasn't open to negotiation,'' Brosnan said in a telephone interview. ``They didn't match on anything.''
Seven-Year Deal
Shares of El Segundo, California-based DirecTV rose $1.13, or 5 percent, to $23.75 at 4:01 p.m. in New York Stock Exchange composite trading. Time Warner Cable, based in Stamford, Connecticut, fell 4 cents to $38.26. Philadelphia-based Comcast climbed 57 cents to $26.85 on the Nasdaq Stock Market.
The cable companies are seeking a seven-year commitment for the Extra Innings package and the MLB Channel. In Demand said the companies would agree to distribute the Baseball Channel to at least as many subscribers as DirecTV has when the channel goes on the air.
The cable companies' offer didn't discuss ownership of the Baseball Channel. FCC rules bar cable companies from demanding an ownership stake in a network as a condition of carriage.
``We have offered to carry The Baseball Channel to the same number of subscribers as Direct TV and have offered the same compensation to MLB as DirecTV,'' Jacobson said.
DirecTV spokesman Robert Mercer declined to comment.
To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net
Last Updated: March 21, 2007 18:04 EDT
By Erik Matuszewski
March 21 (Bloomberg) -- Major League Baseball rejected a bid by cable-television companies to retain a premium package of games, saying the offer doesn't meet demands set by the league.
The proposal by cable companies ``falls short of nearly all the material conditions,'' the league said today in a statement. Baseball said cable companies and EchoStar Communications Corp.'s Dish Network may still match a deal the league struck with satellite-TV operator DirecTV Group Inc.
The dispute threatens to cut off out-of-market baseball games, called the Extra Innings package, to as many as 75 million cable households. The league said the cable industry failed to meet demands related to carrying a new baseball channel that starts in 2009 and fee-sharing.
``We, like many, many others, question MLB's commitment to its fans by limiting distribution of both Extra Innings and the Baseball Channel,'' said Robert Jacobson, president of In Demand Networks, a programming group owned by cable operators including the two largest, Comcast Corp. and Time Warner Cable Inc.
The cable companies were given until the end of the month to match the terms of a March 8 agreement between baseball and DirecTV, which gave the nation's biggest satellite operator the right to broadcast out-of-market games for seven years.
DirecTV also received a stake in the Baseball Channel. Under pressure from lawmakers, Major League Baseball gave up an attempt to make the DirecTV deal exclusive.
Strike Out?
Extra Innings features 60 games a week. If the rival services are unable to reach a deal with baseball, fans would have to subscribe to DirecTV to continue receiving the games. DirecTV has almost 16 million subscribers.
``By rejecting this matching offer, MLB has proven it never intended for In Demand to have a fair and equal opportunity to bid for Extra Innings,'' Jacobson said in a statement. The cable proposal ``was fully responsive'' to the league, he said.
Tim Brosnan, baseball's executive vice president of business, said In Demand wasn't willing to offer the Baseball Channel to enough homes or share fees along the lines sought by the league.
``We made them an offer that wasn't open to negotiation,'' Brosnan said in a telephone interview. ``They didn't match on anything.''
Seven-Year Deal
Shares of El Segundo, California-based DirecTV rose $1.13, or 5 percent, to $23.75 at 4:01 p.m. in New York Stock Exchange composite trading. Time Warner Cable, based in Stamford, Connecticut, fell 4 cents to $38.26. Philadelphia-based Comcast climbed 57 cents to $26.85 on the Nasdaq Stock Market.
The cable companies are seeking a seven-year commitment for the Extra Innings package and the MLB Channel. In Demand said the companies would agree to distribute the Baseball Channel to at least as many subscribers as DirecTV has when the channel goes on the air.
The cable companies' offer didn't discuss ownership of the Baseball Channel. FCC rules bar cable companies from demanding an ownership stake in a network as a condition of carriage.
``We have offered to carry The Baseball Channel to the same number of subscribers as Direct TV and have offered the same compensation to MLB as DirecTV,'' Jacobson said.
DirecTV spokesman Robert Mercer declined to comment.
To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net
Last Updated: March 21, 2007 18:04 EDT
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