Cable Operators

Cable One Opts for ESPN Deal

3/14/2004 4:01 PM Eastern

Cable One Inc., one of the National Cable Television Cooperative’s larger members, expects to opt for the co-op’s new long-term deal with ESPN, officials said.

The 720,000-subscriber MSO, the 10th-largest in the country, is one of the first NCTC members to say it will likely participate in the newly forged affiliation agreement with the giant sports programmer.

That new pact, similar to ones recently negotiated by Cox Communications Inc. and Charter Communications Inc., reportedly calls for annual rate hikes in the 7% range --substantially less than the yearly 20% increases ESPN has been levying -- in exchange for launches of additional ESPN services.

Cable One, for example, is looking to add ESPN HD to its HDTV offering.

The NCTC represents small and midsized operators that collectively have roughly 15 million subscribers.

"We went through their deal today, with a whole group of us [at Cable One], and I think our consensus is yes, we will go with the co-op," Jerry McKenna, the Phoenix-based MSO’s vice president of strategic marketing, said last Monday.

"The good news is that the compounding rates are under 10% [per year]," said McKenna, who also sits on the NCTC’s board. "The bad news is that we’re starting with a $2.50 [per subscriber] rate. So when you look at the premium we pay for ESPN, it’s still high."

But the NCTC deal "is a dramatic improvement and will greatly benefit the members of the co-op," he said.

NCTC members can pick and choose which master carriage deals they want, or they can instead negotiate their own pacts.

Other large NCTC members, such as Mediacom Communications Corp. and CequelIII, said they’re still studying the deal points.

Mike Farrell contributed to this story.

For more on ESPN’s NCTC deal and Cable One, please see Linda Moss’ story on page 1 of Monday’s issue of Multichannel News.

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