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Opening Statement on DirecTV Deal: Carl Vogel - EchoStar Print
User Rating: / 9
Written by Carl Vogel   
Tuesday, 27 March 2007 04:02
President and Vice Chairman,
Echostar Satellite L.L.C
before the
U.S. Senate Commerce, Science, and Transportation Committee

Hearing on Exclusive Sports Programming: Examining Competition and Consumer Choice

March 27, 2007

Chairman Kerry, and members of the Committee, on behalf of EchoStar Satellite, I want to thank you for inviting our company to discuss the important issue of exclusive sports programming.

My name is Carl Vogel, and I am President and Vice Chairman of EchoStar. Since we began offering service 11 years ago, EchoStar’s DISH Network has grown to become the 4th largest multi-channel video provider in the country serving more than 13 million subscribers.

Exclusive content distribution deals in any major sport today do not promote competition. They harm existing consumers while limiting choices in the future.

As we sit here today, the deal presented by Major League Baseball is designed to be an exclusive deal for DirecTV in substance, despite statements to the contrary regarding form and the opportunity to “opt-in”.

The terms offered by Major League Baseball effectively tie the carriage of the Extra Innings package TODAY to a firm commitment to launch The MLB Channel to over 10 million of our subscribers in 2009. We find these demands inconsistent in a climate where Congress, the FCC, and the American public are asking for more a-la-carte choices.

(Select Read More to read the rest of Vogel's opening statement)

Opening Statement: Chase Carey Pres. and CEO of DirecTV Print
User Rating: / 5
Written by Chase Carey   
Tuesday, 27 March 2007 03:54
Chase Carey
President and Chief Executive Officer, DIRECTV, Inc.
Before the
Senate Committee on Commerce, Science, and Transportation
March 27, 2007

Chairman Inouye, Co-Chairman Stevens, and members of the Committee, my name is Chase Carey.  I am the President and CEO of DIRECTV.  Thank you for inviting me to testify today regarding DIRECTV’s recently announced agreement with Major League Baseball (“MLB”) to continue to carry MLB’s Extra Innings package of out-of-town baseball games.

I would like to address four issues today.  First, I’ll describe the fair, open, and arm’s length negotiation for carriage of Extra Innings – a negotiation resulting directly from the pro-competitive, pro-consumer policies Congress has put in place.  DIRECTV has entered into a carriage agreement with MLB, while EchoStar and a consortium of the biggest cable operators remain free to match DIRECTV’s offer until Opening Day.  So when our competitors complain that they don’t have rights to Extra Innings, what they’re really saying is that they’d like to pay less for those rights than DIRECTV – a lament common to many MVPDs in many circumstances.[1]
Second, I will address another aspect of competition at work – DIRECTV’s plan to transform Extra Innings from a mere collection of games in low definition to a truly compelling, high definition experience for the most avid baseball fans.  Regardless of whether our competitors step up to the plate, DIRECTV intends to make more baseball available to more fans in a more compelling format than ever before.  This is a big win for baseball fans.

Third, I’ll explain how the competitive marketplace Congress created will ensure that fans of our Nation’s pastime will not be left behind.  If EchoStar and the cable consortium step up and match DIRECTV’s offer, their subscribers will continue to have access to this programming from those providers.  If they don’t, subscribers who want to switch to DIRECTV can do so seamlessly.  The small number of subscribers who do not or cannot switch will be able to watch games over broadband – an increasingly viable alternative to traditional television.

Fourth, while DIRECTV’s agreement with MLB is entirely consistent with the policies Congress established to create a competitive marketplace, Congress can always change those policies.  But I would respectfully suggest that, if this Committee is concerned about competition and access issues, these issues should be examined within the broader context of communications and competition policy.  Such an examination might address topics such as the tying of video and broadband access services, the “slow-rolling” of access to Internet video, tying arrangements for programming imposed by competitors with market power, and home-team sports exclusives.  DIRECTV would be happy to participate in such a discussion.

(Select Read More to view the rest of Carey's opening statement) 

Opening Statement: Bob DuPuy on DirecTV Deal Print
User Rating: / 6
Written by Bob DuPuy   
Tuesday, 27 March 2007 03:40
March 27, 2007
            Good morning, Mr. Chairman.  My name is Robert DuPuy, and I am the President and Chief Operating Officer of Major League Baseball.  I appreciate the opportunity to appear before you today to discuss Baseball’s recent agreement with DirecTV for The MLB Channel and the MLB Extra Innings package and to outline what we believe are the deal’s benefits for our fans.  We are particularly pleased that so many baseball fans will have access to our all-baseball, all-the-time channel when it launches in two years, and we are grateful to DirecTV for helping us make this happen.
            It is important to emphasize at the outset that our deal with DirecTV permits iN Demand, the consortium created by the cable industry, and the Dish Network to distribute The MLB Channel and the Extra Innings package also.  We hope that they agree to match DirecTV’s commitment to our fans.  Additionally, we would like to stress that both iN Demand and the Dish Network were given a full opportunity to participate in negotiations for the rights that we were granting.
            I want to make one point abundantly clear.  This is not a matter of fans being unable to view Major League Baseball’s out-of-market games.  It is a matter of not being able to watch those games on a particular system.  Out-of-market games are still available, even if iN Demand and Dish do not choose to participate, and are available on multiple platforms.  Baseball provides more telecasts to its fans than any other sport.  After a lengthy negotiation over the renewal of a single package of games, those games were awarded to DirecTV, but even then, the other bidders have been given a chance to match the negotiated terms.   There is nothing sinister, illegal, wrongful or frankly unusual about that form of business negotiation or result.  In fact, as I will explain later, we believe the result is a benefit to our fans.
            If iN Demand and Dish choose not to step up to the plate as DirecTV has done, fans will still have several options.  They can switch to DirecTV, they can subscribe to MLB.TV and watch the games on the Internet, and they can watch the roughly 400 games that every fan in every Major League market has available without the out-of-market package.  That includes virtually every one of the local market games (Red Sox fans throughout the Red Sox’ home territory are completely unaffected by this deal), all of the games on ESPN, Turner and Fox, and the All-Star Game and complete post-season.  Given that our season and postseason are about 200 days, that is about two games per day.  Of course, fans can also listen to local games on the radio and all of our more than 2,400 regular season games nationwide on XM Satellite Radio.
(select Read More to view the rest of DuPuy's opening statement)
Complete Kerry Statement on Extra Innings / DirecTV Deal Print
User Rating: / 3
Written by Sen. John Kerry   
Tuesday, 27 March 2007 03:32

John KerryBelow is the complete opening statement by Sen. John Kerry (D-MA) for today's Full Committee Hearing called “Exclusive Sports Programming: Examining Competition and Consumer Choice”:

I would like to welcome our witnesses.  We are conducting this hearing today to discuss sports programming in general -- and baseball in particular – a very popular topic this time of year in Massachusetts and all over the country.

Last year, baseball fans were able to buy what are called “out of market games” through their cable and satellite providers.  The package of games is called “Extra Innings,” and allows fans to follow their home team.  So Red Sox’s fans living in Washington or California could still get access to most Red Sox games for about what it costs a family of four to attend a game.

Press reports indicated that Major League Baseball was close to announcing an exclusive deal with DirecTV for carriage of these games.  We will evaluate this deal.

Yogi Berra was once heard to say, "You've got to be very careful if you don't know where you are going -- because you might not get there."

That sentiment is as timely now as ever.  We want to examine where the parties are going - and whether this deal will get them there.   Is this type of deal in the best interest of consumers?  Does it serve the sports fans?  These are legitimate questions.

Baseball is an integral part of American culture.  Commissioner Selig himself has said that baseball is a social institution with enormous social responsibility.  I agree with him.
(Select Read More to view the rest of Kerry's opening statements) 
Today: Senate Hearing on DirecTV / Extra Innings Deal Print
User Rating: / 5
Written by The Staff   
Tuesday, 27 March 2007 00:58

MLB and DirecTVAt 10am EST, a hearing with the US Senate Committee on Commerce, Science, and Transportation will take place to address the pending deal to place MLB Extra Innings exclusively on DirecTV.

The title of the hearing is, Exclusive Sports Programming: Examining Competition and Consumer Choice.

Those witnesses to testify are:

Mr. Rob Jacobson
President and Chief Executive Officer
iN DEMAND Networks
Mr. Stephen F. Ross
Professor of Law
The Dickinson School of Law, The Pennsylvania State University
Mr. Robert DuPuy
President and Chief Operating Officer
Major League Baseball
Mr. Chase Carey
Chief Executive Officer
DIRECTV Group, Inc.
Mr. Carl Vogel
President & Vice Chairman
EchoStar Satellite L.L.C.

Senator John Kerry (D-MA), chairs the committee. Today, the Baltimore Sun reports:

"I have no doubt that there are business advantages, but what is the impact on fans? They lose the content," said an advance copy of Kerry's remarks obtained by The Sun. "Or, as we will discover today, they are forced to change their TV service to see games. That is wrong. That is a sign that the system is not working."

Kerry: MLB and DirecTV Deal "Probably Legal" Print
User Rating: / 4
Written by The Staff   
Monday, 26 March 2007 08:07

DirecTV and Extra InningsTomorrow, Sen. John Kerry (D-MA), will chair a Senate Commerce Committee hearing on the deal to make MLB Extra Innings exclusively available on DirecTV. As reported by Eric Fisher for the Sports Business Daily:

Today, Kerry held a teleconference today with reporters in advance of the hearing. While Kerry said he remains concerned about the deal, he said that the structure of it was "probably legal" and did not seem to come forward and say that there were anti-trust implications in the deal. "While not everybody uses [Extra Innings], the access to it is important," Kerry said. "[The MLB-DirecTV deal is] an attempt to corner the market and limit fans. And I'm concerned about that."

As further reported by Fisher, MLB president and COO, Bob DuPuy talked to Kerry via phone this morning in advance of his testifying before committee tomorrow and said, "this is not about games being unavailable, but being unavailable on one particular delivery system."

Ronald Blum of AP further reports:

"Our hope is that iN Demand and Dish opt in and that all fans have an opportunity to receive the `Extra Innings' package," said Bob DuPuy, baseball's chief operating officer. "This is not about iN Demand or Dish not being able to match the DirecTV offer, it is about their willingness to do so. This was a negotiation at arms length over several months. DirecTV set the market. It is up to the other bidders to meet it."

DuPuy is to testify at the hearing along with DirecTV president Chase Carey, iN Demand president Robert Jacobson, EchoStar president Carl Vogel and Penn State law professor Stephen Ross.

"Fans are pretty discerning," Kerry said. "I think they'll have a terrific ability to say, `Well, that's crock or this isn't,' and kind of get a read on it."


DirecTV Releases 2007 Schedule for Extra Innings Print
User Rating: / 2
Written by The Staff   
Saturday, 24 March 2007 17:00

MLB and DirecTVWhile congress will hold hearings on the upcoming deal to make MLB Extra Innings exclusively available on DirecTV on Tuesday, and iN Demand and DISH Networks have until Saturday to match DirecTV's offerings, we do know this: at least DirecTV will be showing Extra Innings this season.

With that, the satcaster has released the upcoming 2007 schedule for Extra Innings.

Be aware, full-blown availability of games do not start until Saturday, the 7th. All games, with the initial date the exception, have TBA for the channels. Below are the games for the first week of the season:

Monday, April 2, 2007

Visiting Team vs. Home TeamTime (ET)ChannelHD Channel
Tampa Bay Devil Rays at New York Yankees1:00 pm20673
Chicago Cubs at Cincinnati Reds2:00 pm20972
Boston Red Sox at Kansas City Royals4:00 pm20673

Friday, April 6, 2007

Visiting Team vs. Home TeamTime (ET)ChannelHD Channel
New York Mets at Atlanta Braves7:30 pmTBA 
Minnesota Twins at Chicago White Sox8:00 pmTBA 
Los Angeles Dodgers at San Francisco Giants10:00 pmTBA 

Saturday, April 7, 2007

Visiting Team vs. Home TeamTime (ET)ChannelHD Channel
Arizona Diamondbacks at Washington Nationals7:00 pmTBA 
Philadelphia Phillies at Florida Marlins7:00 pmTBA 
Seattle Mariners at Cleveland Indians7:00 pmTBA 
Toronto Blue Jays at Tampa Bay Devil Rays7:00 pmTBA 
Pittsburgh Pirates at Cincinnati Reds7:00 pmTBA 
St. Louis Cardinals at Houston Astros7:00 pmTBA 
Boston Red Sox at Texas Rangers8:00 pmTBA 
Colorado Rockies at San Diego Padres10:00 pmTBA 
Oakland Athletics at Los Angeles Angels10:30 pmTBA 

Sunday, April 8, 2007

Visiting Team vs. Home TeamTime (ET)ChannelHD Channel
Baltimore Orioles at New York Yankees1:00 pmTBA 
Philadelphia Phillies at Florida Marlins1:00 pmTBA 
Pittsburgh Pirates at Cincinnati Reds1:00 pmTBA 
Seattle Mariners at Cleveland Indians1:00 pmTBA 
New York Mets at Atlanta Braves1:00 pmTBA 
Arizona Diamondbacks at Washington Nationals1:30 pmTBA 
Toronto Blue Jays at Tampa Bay Devil Rays1:30 pmTBA 
Detroit Tigers at Kansas City Royals2:00 pmTBA 
Chicago Cubs at Milwaukee Brewers2:00 pmTBA 
Minnesota Twins at Chicago White Sox2:00 pmTBA 
St. Louis Cardinals at Houston Astros2:00 pmTBA 
Oakland Athletics at Los Angeles Angels3:30 pmTBA 
Colorado Rockies at San Diego Padres4:00 pmTBA 
Los Angeles Dodgers at San Francisco Giants4:00 pmTBA 


Brosnan Responds to iN Demand Counter-Offer Print
Written by Maury Brown   
Wednesday, 21 March 2007 10:09

As reported earlier, MLB has rejected a counter-offer by iN Demand to keep MLB's Extra Innings on cable this upcoming season. Officials from MLB responded further today as reported by Eric Fisher and John Ourand on Sports Business Daily:

"iN Demand's strategy of negotiation is a failed one," MLB Exec VP/Business Tim Brosnan said. "Our offer to them to match DirecTV remains open, but time is running short." Late Tuesday, iN Demand faxed Brosnan an offer that it said would match DirecTV's terms, guaranteeing the same rates and household distribution as the satellite operator over the next seven years. Brosnan bashed the offer, saying that it does not. "Time and again, we have given iN Demand an opportunity to respond to legitimate offers," he said. "And time and again, they have responded by making misleading statements."

As Fisher and Ourand further report, the key stumbling block is in the way iN Demand structured their offer compared to DirecTV, the carrier that MLB has initially agreed to a 7-year, $700 million agreement with to show Extra Innings exclusively. 

DirecTV has agreed to place the upcoming MLB Channel in 80% of its homes according to a filing with the FCC sent today by MLB President and COO Bob DuPuy. MLB is demanding that cable match the offer of 80% of its homes, as well. Added to this issue is the fact that “iN Demand’s offer to pay for Extra Innings on an actual sub basis, rather than an upfront guarantee”, such as DirecTV has offered.

DuPuy added in the FCC filing that, "[They] will need to commit to a fair allocation of the total rights fees for Extra Innings, ... based on the number of digital households that they and DirecTV serve.”

Maury Brown will discuss this latest news at 6:25PM EDT on XM 175. 

Maury Brown to Talk DirecTV deal on XM 175 at 6:25 EDT Print
Written by The Staff   
Wednesday, 21 March 2007 09:26

Maury BrownMaury Brown of Biz of will be on XM Satellite Radio, Channel 175 with Chuck Wilson tonight at 6:25pm EDT to talk the latest news on iN Demand's offer for Extra Innings, and MLB's comments that seem to reject that offer.

Remember...  6:25pm EDT... XM 175.

DuPuy: iN Demand "falls short of nearly all ... conditions" Print
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Written by Maury Brown   
Wednesday, 21 March 2007 06:46

MLBDon't look for MLB to accept today's offer by iN Demand for Extra Innings. Below is a statement by MLB President and COO, Bob DuPuy on in Demand's offer:

“Today Major League Baseball received communication from iN Demand. The offer to match the terms of the agreement reached by MLB and DIRECTV remains open to iN Demand and Dish until the deadline of March 31, 2007. The communication sent to our office today by iN Demand is not responsive to that offer. In spite of their public comments, the response falls short of nearly all of the material conditions (among them requirements for carriage of The Baseball Channel and their share of the rights fees for Extra Innings) set forth in the Major League Baseball offer made to them on March 9.”

MLB's response should set the stage for an interesting hearing on Tues. There is little doubt that members of congress will want to know what exactly was offered and why MLB has turned it down. 

iN Demand Offers to Meet DirecTV's Offer for Extra Innings Print
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Written by Maury Brown   
Wednesday, 21 March 2007 05:49

in DemandiN Demand, the collection of cable providers, of which Time Warner and Cox Communications are a part of, today offered to meet the conditions that MLB and DirecTV have offered for retaining Extra Innings, the package that shows out-of-market games for MLB. The details includes financial elements, as well as a provision to make the upcoming MLB Channel "distribution to at least the number of subscribers to which DirecTV launches the channel."

“As the current home for Extra Innings for more than 200,000 cable subscribers, we have extended ourselves to do our best to be able to continue to provide this package to baseball fans  and our customers,” said Robert D. Jacobson, President and CEO of iN Demand Networks in a statement.

“This offer meets all the conditions set forth by MLB last week. Throughout this entire process, our goal has always been to respect the wishes of baseball fans who currently subscribe to Extra Innings through their local cable provider, and we stand ready to execute an agreement before the beginning of the baseball season,” Jacobson said.

Bob DuPuy, MLB’s president and COO did not have comment pending details of the offer.

Both Jacobson and DuPuy are slated to testify in hearings before members of congress on the proposed deal on Tuesday.

MLB officials have given iN Demand and DISH Network until the end of the month to meet DirecTV’s offer, or the Extra Innings would become an exclusive deal by which DirecTV would be the sole provider. The extended agreement that MLB and DirecTV have brokered would be for 7-years and $700 million. If iN Demand were allowed to continue to carry Extra Innings, the financial elements offered by DirecTV would change due to the removal of exclusivity.

DuPuy & Jacobson to Appear at Hearings Over DirecTV deal Print
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Written by The Staff   
Tuesday, 20 March 2007 09:47

DirecTV and MLBAdd MLB President & COO Bob DuPuy as well as iN Demand president Rob Jacobson as two that will testify at next Tuesday’s U.S. Senate Commerce Committee regarding the deal to place MLB Extra Innings exclusively on DirecTV.

The session, entitled, “Exclusive Sports Programming: Examining Competition and Consumer Choice,” does not yet have a full list of those that might testify before the committee.

Cox Offers MLB.TV Subscriptions for Free Print
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Written by Maury Brown   
Monday, 19 March 2007 05:37

Cox CommunicationsAs we reported last week, some cable companies may look to offer deeply discounted or free subscriptions to MLB’s online offering for out-of-market games, MLB.TV. The move is in response to the deal that—short of intervention from the FCC or Congress—will place Extra Innings exclusively on DirecTV.

Today, Cox Communications becomes the first cable company to offer MLB.TV free to subscribers of Extra Innings last season via rebate. A special promotions page has been setup by Cox, and the disclaimer on the page reads in part, “Major League Baseball Properties, Inc., are not sponsors of Cox High Speed Internet service or this offer.”

In regards to bulk-buying MLB.TV by carriers, last week, an MLB official said “we will not allow any of our assets to be used to undermine this deal” through an effort such as bulk buying of MLB.TV subscriptions.

Cox is part of iN Demand, the group of cable providers that has been in negotiations with MLB to retain Extra Innings on cable and MLB has not publicly reacted to the promotion.

Earlier this month,  Robert Jacobson, the president and CEO of iN Demand, set the stage by calling MLB’s agreement with DirecTV a "de facto exclusive deal."

Jacobson said the agreement contained "conditions for carriage that MLB and DirecTV designed to be impossible for cable and DISH to meet."

EchoStar "Calls into Question" Extra Innings Deal Print
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Written by The Staff   
Wednesday, 14 March 2007 09:29

EchoStarEchoStar Communications CEO Charlie Ergen said today that his company (parent of DISH Network) has yet to meet with MLB officials to see if they will somehow continue to be able to offer Extra Innings to their customers, and “called into question” whether MLB was willing to offer DISH and iN Demand the same deal as they are offering DirecTV.

Ergen mentioned the fact that as of this date, EchoStar and iN Demand have not been offered a stake in the MLB Channel. MLB has offered up a 20% stake in the channel to DirecTV. Ergen added that EchoStar is “not interested in signing a deal that forces it to carry the channel on its most widely distributed basic package when so few of its customers subscribe to Extra Innings”

Senate to Hold Hearings: MLB DirecTV / Extra Innings deal Print
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Written by The Staff   
Wednesday, 14 March 2007 01:15

DirecTV and MLBAlong with March 31st (the deadline by MLB for cable and DISH to meet DirecTV's offer), put March 27th on your calendar as well.

The U.S. Senate Commerce Committee has scheduled that date to hold hearings on the deal announced last Thursday to place MLB Extra Innings exclusively on DirecTV.

Sen. John Kerry (D-MA) will chair the hearing, which should be quite interesting.

"The senator all along has wanted to know more about this, so he's going to be asking a number of questions," said Vincent Morris, Kerry's spokesperson. "We're going to be looking to hear from all interested parties: baseball, satellite carriers, probably the cable operators, possibly ordinary fans. We're still putting it all together."

(this post compiled from wire reports)

Will Cable Try to Bulk-Buy MLB.TV Subscriptions? Print
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Written by Maury Brown   
Monday, 12 March 2007 10:53

MLB.TVIn an interesting twist to the Extra Innings / DirecTV deal, cable may opt to go the online route, as opposed to trying to match DirecTV’s offer of placing the MLB Channel on the basic tier.

To compete, iN Demand may take an interesting side route to keep from losing customers to DirecTV: offer free or deeply discounted access to MLB.TV, the MLBAM controlled online version of Extra Innings.

As reported today by John Ourand and Eric Fisher of the Sports Business Journal:

This strategy would see cable operators seek to buy subscriptions to the full season of online programming from MLB Advanced Media and offer them to their former Extra Innings subscribers, who would then be able to watch the out-of-market games online.

If cable pursues this path, it would hope that the offering would mollify angry subscribers who are no longer able to subscribe to the out-of-market package.

Such a tactic would surely raise the ire of MLB through MLB Advanced Media. While Ourand and Fisher could not get anyone on record, they did report that a senior MLB official said “we will not allow any of our assets to be used to undermine this deal” through an effort such as bulk buying of MLB.TV subscriptions.

In another interesting twist, there is the possibility that the operators would stall their response to the MLB/DirecTV deal in the hopes of thwarting a marketing campaign. Already DirecTV CEO Chase Carey has made mention that marketing the package will be difficult by presenting the incumbents with a window of the end of the month in which to respond.

“There’s a degree of short-term uncertainty — this agreement has a period where it’s not clear how these rights end up in terms of exclusive versus nonexclusive rights,” Carey said. “It creates some short-term issues as to how we develop the properties around it, but we’ll work through that.”

With the season at hand, this author is getting besieged with emails asking when the deal will be in place so that a decision can be made to jump to DirecTV or stay put. The problem is… you may not know until the first pitch on Opening Day is thrown out. With that in mind, consider this… Here’s how DirecTV is currently advertising the Extra Innings package. Look at the dates on the deal (emphasis mine):

Get MLB EXTRA INNINGS now for just 4 payments of $39.99 — a savings of $40 off the regular season price!
(Must order DIRECTV service by 4/7/07 and activate by 4/15/07)

On BP: Not a Done Deal... Yet Print
Written by Maury Brown   
Monday, 12 March 2007 07:43

Maury BrownAs announced on Thursday, MLB and DirecTV now have an expanded agreement that would place Extra Innings on DirecTV exclusively if cable (iN Demand) and EchoStar's DISH Network do not meet the same provisions that DirecTV has offered by the end of the month.

Today on Baseball Prospectus I go deep into the deal, and report that barring something extraordinary, the exclusive deal will go through. As report on Not a Done Deal... Yet, I touch on how the new MLB Channel is the key to the new deal. How MLB wants it on the basic tier, and how a similar deal with the NFL Network directly impacts why iN Demand would be hard pressed to agree to such a provision.

Within the report is news from Friday where MLB officials met with iN Demand executives to try and hammer a deal out. And, how Senator Arlen Specter is getting into the mix with not just NFL Sunday Ticket, but the Extra Innings deal, as well.

Also, I provide some little known facts about DirecTV and MLB.TV in case you decide to look at options outside of cable and DISH to get your out-of-market games. 

Remember to vote on our new poll in the upper right (results here) and check Baseball Prospectus for the extensive article.

 Maury Brown is the founder of The Biz of Baseball, an author for Baseball Prospectus, and reports sports business on Maury Brown's Biz of Sports. He can be contacted here. 

MLB Meets With iN Demand on Extra Innings Print
Written by The Staff   
Monday, 12 March 2007 03:48

iN DemandFollowing up with their announcement to make DirecTV the exclusive carrier of Extra Innings unless cable (iN Demand) and EchoStar’s DISH Networks meet the same terms that DirecTV has offered, MLB officials met with executives from iN Demand to try and reach a deal. As reported by Multichannel News:

But right now it doesn’t look like those negotiations will yield a home run deal with cable operators. Pay-per-view and video-on-demand content distributor In Demand, which is representing the cable industry, immediately shot down baseball’s pitch, calling it “a de facto exclusive deal” with carriage provisions that are impossible for cable operators to meet.

Meanwhile, the three-week negotiation grace period puts DirecTV in financial and marketing limbo. DirecTV CEO Chase Carey said its reported $100 million-a-year payment to baseball for the package will drop “significantly” if it loses exclusivity to cable or EchoStar.

“There’s a degree of short-term uncertainty — this agreement has a period where it’s not clear how these rights end up in terms of exclusive versus nonexclusive rights,” Carey said. “It creates some short-term issues as to how we develop the properties around it, but we’ll work through that.”

Maury Brown will be following up on this subject today on Baseball Prospectus.

The Extra Innings “Poison Pill” Print
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Written by Maury Brown   
Friday, 09 March 2007 01:05

Maury BrownAt yesterday’s press conference announcing MLB and DirecTV’s expanded agreement of seven years and $700 million, there was a sense that MLB had caved—that pressure from the fans, the likes of Senator Kerry and the FCC had won the day, and in the end, Extra Innings would somehow remain on cable (InDemand), and EchoStar’s DISH Network.

"In response to those concerns of our fans, baseball has negotiated with DirecTV to offer the package to the incumbents," Major League Baseball President Bob DuPuy said. "I hope that those fans who have been directing their concerns to us over the last several weeks will now encourage their cable carriers to in fact enlist for this package."

Indeed after the announcement, John Kerry’s statements seemed to somewhat back away from threats. “I will review this deal to ensure it benefits consumers,” Kerry said. “I'm encouraged that Major League Baseball may be willing to provide broader access to their games than what was initially proposed.”

MLB and DirecTV were brilliant in how they framed the opening for the other carriers: Place our upcoming The MLB Channel on your basic tiers, be consistent with the rates and carriage requirements by March 31st, and we’ll back away from the exclusive deal we have on the table with DirecTV.

I say “brilliant”, as it was a poison pill provision.

Both MLB and DirecTV know that barring something extraordinary, InDemand will never offer up placing The MLB Channel on the basic tier. Why? Because the NFL wanted the same thing for The NFL Network, and Time Warner, one of the stakeholders of InDemand pulled The NFL Channel when the league wanted the channel (you guessed it) on the basic tier.

"In general, we've asked for the equivalent of one movie ticket per subscriber per year for us to be included on their most broadly distributed tier, or basic tier,” said NFL Network spokesman Seth Palansky in September of 2006.

At the time, Time Warner said it didn’t have an "agreement it can live with."

If InDemand wasn't willing to offer up the basic tier for the NFL, how could they do so with MLB? It would set up all kinds of legal scenarios, and place InDemand in a position of having to offer the same to other sports industries when renewals or new deals are brokered. Some might simply say that DirecTV offered up a better deal. 

True to form, comments yesterday by Robert Jacobson, the president and CEO of InDemand, set the stage by calling it a "de facto exclusive deal."

Jacobson said the agreement contained "conditions for carriage that MLB and DirecTV designed to be impossible for cable and DISH to meet."

In response, Tim Brosnan, the executive vice president for business for MLB said, “I’m not sure how InDemand can comment on an offer that hasn’t been made.” And he then added that the offers would be coming “in short order”.

So, while you may be cursing through your teeth, you have to say that MLB covered their bases. It was, as mentioned, a set of brilliant business moves.

So, prepare yourself; the exclusive deal is coming. To that end, I will be expanding on the deal Monday on Baseball Prospectus, and offer up some little known aspects of DirecTV that will help you determine whether to make the jump to the satcaster, jump to MLB.TV, or say, “Thanks, but no thanks.”

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

Kerry Statement on Today's Extra Innings / DirecTV Deal Print
Written by Maury Brown   
Thursday, 08 March 2007 10:30
John KerrySen. John Kerry issued the following statement today following the announcement from Major League Baseball and DirecTV.

"I will review this deal to ensure it benefits consumers. I'm encouraged that Major League Baseball may be willing to provide broader access to their games than what was initially proposed. I will be watching closely to ensure the league works in good faith so that America's pastime is available to all fans. My concern all along has been that fans continue to have the ability to enjoy baseball on television."


Page 9 of 11


Should MLB Force Jeffery Loria to Sell the Marlins?