http://www.charlotte.com/business/story/244756.html
PETER GRANT AND ADAM THOMPSON
Wall Street Journal
As football season approaches, the cable industry is gang-tackling a fledgling network created by the powerful National Football League.
Time Warner Cable Inc. and Cablevision Systems Corp. are refusing to carry the NFL Network, launched in 2003, on the league's terms. Charter Communications Inc., whose controlling shareholder owns the Seattle Seahawks, stopped carrying the network in late 2005 because of a contract dispute. Comcast Corp., the country's largest cable operator, yanked the NFL Network out of millions of homes after a bitter battle. The NFL tried to stop Comcast by suing, but lost. The case is now on appeal.
At the heart of the debate: How much pro football is enough for America's already robustly served TV fans? The NFL, long able to command top dollar, says viewers are still insatiable.
But after years of budgetary woes caused by the skyrocketing cost of football, cable executives say they -- and viewers -- have had enough. Die-hard football fans can now watch as many as 16 regular-season games a week via broadcast, cable and satellite operators.
Complaints about the cost of cable, driven in large part by the cost of sports, have been escalating. "Not all our customers are passionate sports fans," says Steve Burke, Comcast's chief operating officer. "And many of them are not interested in paying more" for football programming. In New York City, roughly 20 percent of an average customer's standard cable bill goes to sports channels, regardless of whether the customer watches them.
Cable executives say the NFL finally got tripped up by its arrogance.
"They believe no matter what they do, you have to have it," says Fred Dressler, who was Time Warner Cable's lead negotiator on programming before he retired late last year.
The network says it is currently available to 44 million homes, although Comcast says the figure is millions less than that; at least one team owner expected the number to be closer to 70 million.
It doesn't break the hearts of cable executives that the man quarterbacking the struggling NFL effort is Steve Bornstein, whom they largely hold responsible for the high cost of football. Prior to the NFL, Bornstein headed Walt Disney Co.'s ESPN unit and honed its strategy of paying the league large sums to broadcast football games -- and then charging cable companies massive fees to carry ESPN.
Bornstein insists demand for additional football programming is strong and the NFL Network is performing as expected. "To me the glass is half full," he says. Indeed, viewership of over-the-air television broadcasts of NFL games climbed every year between 2003 and 2006 and this year's Super Bowl, which aired on CBS, ranked as the third-most-watched program in U.S. TV history
.
Cable's rebellion represents a rare setback for the NFL. Considered the gold standard of sports programming, the league now earns $3.7 billion in fees annually by selling games to the likes of ESPN, NBC and CBS. That's more than the National Basketball Association, the National Hockey League, Major League Baseball and NASCAR combined.
Skyrocketing fees have allowed team owners to pay football stars enormous salaries, like the $98 million the Indianapolis Colts are reportedly paying quarterback Peyton Manning over seven years.
The NFL's recent problems are emboldening cable operators in their dealings with the proliferation of other sports networks. For example, most large operators are arguing against including the Big Ten Network in their most popular digital packages. A new channel being launched this month, the Big Ten Network is a venture of Fox Cable Networks and the Big Ten Conference, a collegiate-sports association.
ESPN's strategy of paying top dollar for football has been hugely profitable for the network -- and a major headache for cable and satellite operators. Today, cable companies pay ESPN more than $3 a month for every household that gets the signal, compared with 30 to 50 cents for popular cable networks like CNN and MTV.
Bornstein's success at ESPN propelled him higher at Disney. Bornstein was named president and chief executive of the NFL Network in early 2003. But he ran into problems with cable companies, which have long been annoyed with the NFL for driving up the cost of ESPN and for Sunday Ticket -- a premium satellite service that allows DirecTV subscribers to watch up to 14 games every Sunday. Executives at some cable companies griped that the NFL's Network's price of 15 to 20 cents a subscriber was too much for a network then focused on second-tier programming like preseason games, highlights and historic footage.
From Day 1, Time Warner and Cablevision played it tough, scoffing at Bornstein's warnings that they would lose subscribers to satellite TV if they didn't carry the NFL Network.
That said, some cable companies are playing both sides of the issue. Many of the operators, Comcast included, have invested in their own sports networks that apply the same strategy used by ESPN and the NFL.
The NFL Network regularly got top Nielsen ratings in its time slot among cable networks when it aired regular-season games last year. But viewership of those games still falls far short of Monday Night Football, the other nationally televised game on a cable network. Also, the NFL Network usually doesn't crack the top-40 cable-network shows of the week during the offseason.
NFL Network officials insist that placing the channel on a sports tier -- an extra-cost package for cable subscribers -- is out of the question.
Bornstein says the NFL Network has helped cable, satellite and telephone companies gain customers while some "holdout" cable companies have lost them. This shows, he says, that Time Warner and Comcast's rivals "made the right choice by partnering with us -- America's most popular sport."
Panthers on NFL Network
The Panthers-Cowboys game -- scheduled for Dec. 22 at Bank of America Stadium -- is one of eight exclusive prime-time broadcasts this season by the NFL Network, which is unavailable on Carolinas cable systems.
The NFL's exclusivity agreement will allow one local station an over-the-air broadcast of the game, if the game sells out. The game is a sellout, according the Panthers' Web site. But the rest of the region will be blacked out, except for fans with a satellite system like Dish Network or DirecTV.
Among other late-season NFL Network games: Indianapolis at Atlanta, Thanksgiving Day; Green Bay at Dallas, Nov. 29; Chicago at Washington, Dec. 6.
PETER GRANT AND ADAM THOMPSON
Wall Street Journal
As football season approaches, the cable industry is gang-tackling a fledgling network created by the powerful National Football League.
Time Warner Cable Inc. and Cablevision Systems Corp. are refusing to carry the NFL Network, launched in 2003, on the league's terms. Charter Communications Inc., whose controlling shareholder owns the Seattle Seahawks, stopped carrying the network in late 2005 because of a contract dispute. Comcast Corp., the country's largest cable operator, yanked the NFL Network out of millions of homes after a bitter battle. The NFL tried to stop Comcast by suing, but lost. The case is now on appeal.
At the heart of the debate: How much pro football is enough for America's already robustly served TV fans? The NFL, long able to command top dollar, says viewers are still insatiable.
But after years of budgetary woes caused by the skyrocketing cost of football, cable executives say they -- and viewers -- have had enough. Die-hard football fans can now watch as many as 16 regular-season games a week via broadcast, cable and satellite operators.
Complaints about the cost of cable, driven in large part by the cost of sports, have been escalating. "Not all our customers are passionate sports fans," says Steve Burke, Comcast's chief operating officer. "And many of them are not interested in paying more" for football programming. In New York City, roughly 20 percent of an average customer's standard cable bill goes to sports channels, regardless of whether the customer watches them.
Cable executives say the NFL finally got tripped up by its arrogance.
"They believe no matter what they do, you have to have it," says Fred Dressler, who was Time Warner Cable's lead negotiator on programming before he retired late last year.
The network says it is currently available to 44 million homes, although Comcast says the figure is millions less than that; at least one team owner expected the number to be closer to 70 million.
It doesn't break the hearts of cable executives that the man quarterbacking the struggling NFL effort is Steve Bornstein, whom they largely hold responsible for the high cost of football. Prior to the NFL, Bornstein headed Walt Disney Co.'s ESPN unit and honed its strategy of paying the league large sums to broadcast football games -- and then charging cable companies massive fees to carry ESPN.
Bornstein insists demand for additional football programming is strong and the NFL Network is performing as expected. "To me the glass is half full," he says. Indeed, viewership of over-the-air television broadcasts of NFL games climbed every year between 2003 and 2006 and this year's Super Bowl, which aired on CBS, ranked as the third-most-watched program in U.S. TV history
.
Cable's rebellion represents a rare setback for the NFL. Considered the gold standard of sports programming, the league now earns $3.7 billion in fees annually by selling games to the likes of ESPN, NBC and CBS. That's more than the National Basketball Association, the National Hockey League, Major League Baseball and NASCAR combined.
Skyrocketing fees have allowed team owners to pay football stars enormous salaries, like the $98 million the Indianapolis Colts are reportedly paying quarterback Peyton Manning over seven years.
The NFL's recent problems are emboldening cable operators in their dealings with the proliferation of other sports networks. For example, most large operators are arguing against including the Big Ten Network in their most popular digital packages. A new channel being launched this month, the Big Ten Network is a venture of Fox Cable Networks and the Big Ten Conference, a collegiate-sports association.
ESPN's strategy of paying top dollar for football has been hugely profitable for the network -- and a major headache for cable and satellite operators. Today, cable companies pay ESPN more than $3 a month for every household that gets the signal, compared with 30 to 50 cents for popular cable networks like CNN and MTV.
Bornstein's success at ESPN propelled him higher at Disney. Bornstein was named president and chief executive of the NFL Network in early 2003. But he ran into problems with cable companies, which have long been annoyed with the NFL for driving up the cost of ESPN and for Sunday Ticket -- a premium satellite service that allows DirecTV subscribers to watch up to 14 games every Sunday. Executives at some cable companies griped that the NFL's Network's price of 15 to 20 cents a subscriber was too much for a network then focused on second-tier programming like preseason games, highlights and historic footage.
From Day 1, Time Warner and Cablevision played it tough, scoffing at Bornstein's warnings that they would lose subscribers to satellite TV if they didn't carry the NFL Network.
That said, some cable companies are playing both sides of the issue. Many of the operators, Comcast included, have invested in their own sports networks that apply the same strategy used by ESPN and the NFL.
The NFL Network regularly got top Nielsen ratings in its time slot among cable networks when it aired regular-season games last year. But viewership of those games still falls far short of Monday Night Football, the other nationally televised game on a cable network. Also, the NFL Network usually doesn't crack the top-40 cable-network shows of the week during the offseason.
NFL Network officials insist that placing the channel on a sports tier -- an extra-cost package for cable subscribers -- is out of the question.
Bornstein says the NFL Network has helped cable, satellite and telephone companies gain customers while some "holdout" cable companies have lost them. This shows, he says, that Time Warner and Comcast's rivals "made the right choice by partnering with us -- America's most popular sport."
Panthers on NFL Network
The Panthers-Cowboys game -- scheduled for Dec. 22 at Bank of America Stadium -- is one of eight exclusive prime-time broadcasts this season by the NFL Network, which is unavailable on Carolinas cable systems.
The NFL's exclusivity agreement will allow one local station an over-the-air broadcast of the game, if the game sells out. The game is a sellout, according the Panthers' Web site. But the rest of the region will be blacked out, except for fans with a satellite system like Dish Network or DirecTV.
Among other late-season NFL Network games: Indianapolis at Atlanta, Thanksgiving Day; Green Bay at Dallas, Nov. 29; Chicago at Washington, Dec. 6.
