Updated: Comcast Would Move NFL Network Off Tier If Service Drops Price: Roberts
Monthly License Fee Of 25 Cents Could Trigger Broader Distribution
By John Eggerton -- Multichannel News, 4/18/2009 5:12:00 PM
Testifying on the final day of a weeklong Federal Communications hearing on the NFL Network's program carriage complaint, Comcast chairman and CEO Brian Roberts said that the migration of the pro football network to a sports tier concerned money -- and was not retaliatory or about favoring networks it owns.
Roberts said the amount was $50 million a year and growing -- that's how much the cable operator saves in license fees by carrying the net on the sports tier, where fewer subscribers means lower affiliate fees.
In fact, Roberts said NFL Network's positioning is still about money.
Roberts said Friday that Comcast would be willing to move the NFL Network off the sports tier if the NFL would agree to lower the channel's monthly per-sub fee from the current 70 cents or so to the approximately 25 cents Golf Channel and Versus command. Those are the nets affiliated with Comcast that the NFL said the operator was favoring.
The issue has some urgency, since Comcast's current contract to carry the NFL Network expires April 30. Comcast has also agreed to extend the current contract under the same terms, maintaining its position on a sports tier.
Asked if the league would entertain either of those options, an NFL spokesman only said: "The NFL wants NFL Network to be available widely at no extra cost to fans."
But the NFL would likely not see Comcast's D-2 offer as being comparable, since Versus and Golf are on a basic tier with 20 million homes, while only 1 million to 2 million currently take the sports tier.
Roberts agreed with NFL attorney Will Phillips that after Comcast did not get what the executive labeled a legitimate shot at bidding on rights to the NFL Sunday Ticket package; after the NFL went to the FCC to complain about Time Warner's lack of carriage of the network; and after the NFL launched a $100 million marketing campaign against Time Warner and Cablevision, that a state of war existed with the league.
Roberts said he had anticipated that the NFL would file a program carriage complaint when Comcast first started moving the network to the sports tier -- Phillips had an e-mail from Roberts to that effect.
Roberts said that the company had considered what might happen from legal and public relations perspectives, but that the move ultimately was made because it yielded about $50 million or more in annual savings.
Phillips got Roberts to agree that if Versus -- then OLN -- had obtained the rights to a package of eight primetime games it would have probably tried to raise the price of its channel, as the NFL did of its network when it decided to keep the games there.
But Roberts also said that was a hypothetical, since there was never any consideration of simply adding those games. The Comcast boss said the bid for the games was part of a larger strategy to create a multisport network--NHL, Major League Baseball and football--to compete with ESPN.
Phillips pointed out that Comcast had at one point given NFL owners an option of making OLN into an all-football channel. Roberts said that had indeed been the case, but it would have involved other football as well, rather than simply the eight games.
Relative to the suggestion that Roberts had used the tiering the network as a threat, then carried out that threat as retaliation, the Comcast chairman said he was instead making make sure the league owners were aware of the company's contractual right to move the network to a sports tier, suggesting he could not be sure that point had been conveyed by league negotiators.
He said he did talk to league officials about the difficulty of getting cable operator carriage for the NFL Network at the price increase it was seeking, but did so before he knew that Comcast was not going to get the eight-game package.
Roberts came back several times to the millions in affiliate-fee savings from moving the network.
The judge will likely not rule for a month or so, and not before each side presents a proposal for resolution. Then it goes to the full commission. Whoever loses could take the decision to federal court.
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I pay extra for NFL network on comcast anyway, so I dont see what the big deal is! I pay the extra so I can watch the thursday night games on the network! If comcast dont make some kind of deal I may drop their service, witch I dont want to do because I love there service! But I also love my football! Make the deal comcast!
Jeremy Holmes - 4/25/2009 2:09:01 PM EDT
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