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Breaking Down the New Extra Innings Agreement Print
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Written by Maury Brown   
Thursday, 05 April 2007 01:28

As announced last night, MLB and iN Demand—a consortium of cable operators including Time Warner Entertainment-Advance/Newhouse Partnership, Comcast iN Demand Holdings Corp and Cox Communications Holdings Inc.—have reached an agreement which allows MLB Extra Innings to be continued to be shown on cable. The agreement was brokered in large part with DirecTV, who had originally inked a deal with MLB for a 7-year, $700 million deal which would have made them the exclusive provider for MLB’s out-of-market television package.

Today, the landscape has changed. Here’s a break down of where things are at the day after the announcement:

  • When MLB and DirecTV announced their exclusive deal on March 8th, it was announced that 15 million households would receive The Baseball Channel when launched in 2009. With iN Demand on-board, that figure will leap to 40 million total households, an incredible offering for the fledgling channel.
  • The original exclusive agreement had DirecTV holding a 20% ownership stake. Now, DirecTV and iN Demand will own 16% respectively.
  • MLB’s total dollar amount for Extra Innings through 2013 will remain at $100 million a year for 7-years from DirecTV and iN Demand. If DISH comes to an agreement, the $50 million each figure will be adjusted.
  • EchoStar’s DISH Network will have to come to a separate agreement if they wish to retain Extra Innings. As of publication, they were still negotiating and had not reached an agreement.
  • MLB will reap substantial revenues from The Baseball Channel when it goes on the air in 2009. Reports show that annual subscriber revenues will come in at $120 million annually, thus adding an additional $600 million in total revenues to the Extra Innings component. In total for 7-years, MLB will pull in $1.3 billion.
  • Many games are already being shown on cable.
  • The SuperFan Package is only available on DirecTV. That package includes up to 10 games a week in HD, a "Game Mix" channel, which is a Mosaic-like option, and the Strike Zone Channel, which takes you to key plays as they happen across a variety of games.
  • iN Demand will make the package available today to other cable operators like Cablevision and Charter, who must make individual deals.
  • iN Demand will make Extra Innings available at a discount for a short period of time after the Free Preview period is over. iN Demand announced that the package will be available for $159 for that short period.

Look for more details throughout the day on The Biz of Baseball.

Maury Brown is the founder and president of The Biz of Baseball and an author for Baseball Prospectus. He can be contacted here.

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