Bolstering NFL Network Top Priority for Owners

This is a big business week for the NFL: The Lords of the Gridiron — also known as the owners — may decide to opt out of their collective bargaining agreement with their players. At the same time, they plan to go to Washington to beg for federal relief in the form of a Federal Communications Commission ruling that the league hopes will get the NFL Network onto a number of cable systems. In the background of these two major issues is the ongoing Spygate saga — which, for some inexplicable reason, has become a major concern of Senator Specter of Pennsylvania.Cable television and collective bargaining issues involve money: NFL owners feel they are giving too much revenue to the players and are also losing millions of dollars annually because big multiple systems operators (MSOs), such as Comcast (the nation’s largest, with 24 million subscribers), Time Warner, and Cablevision, will not add the channel to their basic expanded lineups.There has been little progress between the MSOs and the NFL since week 17 of last season. On December 29, 2007, the Patriots-Giants contest in East Rutherford, N.J., became a political football, metaphorically speaking, as the game was scheduled to be carried by the NFL Network. At that time, the channel reached only 43 million cable and satellite homes — out of a possible 95 million homes — in the nation. Senator Kerry of Massachusetts first suggested that the December game (which featured the then-undefeated Patriots) be moved to NBC, possibly as a Sunday night presentation. But the NFL wanted to keep the game on the NFL Network to give the league some leverage in its ongoing talks with cable operators.Kerry, along with Specter and Senator Leahy of Vermont, wrote a letter to the commissioner of the NFL, Roger Goodell, in which they threatened to reconsider the limited antitrust exemption that the NFL enjoys (although none of senators was specific as to what the Senate could really do). Following that pressure, the game was shown on CBS and NBC — as well as on the NFL Network.The NFL wants cable companies to carry its network on a basic expanded tier so that all subscribers get the channel, whether they want it or not. (This is the same arrangement that covers such channels as ESPN, CNN, and the Weather Channel.) But the big MSOs objected to the cost of the NFL Network and questioned whether it was a value to subscribers. League owners and the MSOs have been at odds since the league signed an exclusive deal for its NFL Sunday Ticket package with the satellite system DirecTV. Cable operators will not be able to bid on the NFL Sunday Ticket package until after the 2010 season. Not being able to strike a deal, then, shouldn’t come as a surprise.In a specific battle, the league and Comcast have been feuding since 2005, when the league pulled out of an agreement to allow the Versus network (owned by Comcast) to carry a limited Thursday-Saturday package. In an about-face, the NFL then assigned the package to its NFL Network in 2006. Had Comcast gotten the NFL package, it could have set up Versus as a serious threat to ESPN’s dominance, as the network had already landed an American NHL cable contract and was negotiating with MLB for a limited package of games. The NFL deal would have greatly accelerated the introduction of Versus to MSOs.There is one theory, which has been floating around for some time, that the NFL decided to keep Versus’s promised limited package for the NFL Network not necessarily because the owners wanted to grow their own network, but rather because the owners didn’t want to share additional cable television revenues with their players, as the league and players were negotiating a new collective bargaining agreement in late 2005. Owners are currently negotiating a new collective bargaining agreement — one that low-revenue teams hope will get them even more revenue through sharing — but if an agreement isn’t made, 2011 could be a lockout year.Lately, the league has failed miserably to get the support of lawmakers to put the NFL Network on basic expanded tiers. On May 6, the NFL Network filed a complaint with the FCC, accusing Comcast of discriminating against the league-owned sports channel in violation of equal treatment requirements under the 1992 Cable Act. Lawyers for the NFL think Comcast is violating the law because Versus receives wider distribution on Comcast cable systems. NFL lawyers also think that Versus ended up with the Pac-10/Big 12 conference football games contract because Versus has more subscribers than the NFL Network. But on May 8, the chairman of the FCC, Kevin Martin, essentially told the NFL not to expect relief from the commission, saying he would not try to adopt rules that could help the NFL Network get carriage on Comcast systems across America.Only one million Comcast subscribers have purchased the NFL Network. If the NFL is charging a dollar per subscriber per month, the NFL has lost a quarter of a billion dollars annually in its dispute with Comcast.The league, though, is protecting itself from the kind of mishap that could have taken place last December: All of the week 17 games for next season are on either CBS or FOX and available to the entire country on over-the-air television.evanjweiner@yahoo.com

Bolstering NFL Network Top Priority for Owners

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