Comcast 'Threatened’ NFL4/18/2009 2:00 AM Eastern
Former NFL commissioner Paul Tagliabue told a Federal Communications Commission judge last Thursday that Comcast CEO Brian Roberts used the veiled threat of collaborative action by the cable industry if the league did not license an eight-game package to its OLN network, now known as Versus. The league eventually decided to keep the games and put them on its NFL Network.
Tagliabue’s remarks came during testimony at a hearing on the NFL’s program carriage complaint against Comcast, with the top cable operator’s CEO Brian Roberts slated to counter that characterization in testimony expected later last week.
At issue is whether Comcast discriminated against the NFL by moving the NFL Network to a sports tier. Roberts, in his prepared testimony, says clearly not, since it had a contractual right to do so. Tagliabue said he was not familiar with the details of the contract, but that the broad strokes were “wide distribution,” and that the move was a retaliatory strike that reduced that distribution.
In his testimony, Tagliabue said that in a Jan. 27, 2006, phone call informing Roberts that the NFL had decided to keep the games, Roberts responded by saying that “your relationships with the cable industry are going to get very interesting,” which he said he took to mean it would not be “business as usual” with the cable operators, and that they could collectively favor Versus, which he said Comcast wanted to use to take on ESPN.
“In retrospect,” said Tagliabue, “I believe that Mr. Roberts’ statement foreshadowed Comcast’s retaliation against the league and NFL Enterprises.” He said that retaliation was in the form of moving the NFL Network to a premium sports tier that was “available to far fewer of Comcast’s subscribers.”
Comcast lawyer Michael Carroll countered that that wasn’t quite accurate, since it was available to just as many, so long as they were willing to pay for the sports tier.
A lawyer with the FCC’s Enforcement Bureau asked Tagliabue whether he had followed up with Roberts on the issue of whether the Comcast executive was talking about the entire cable industry or simply his own company. Tagliabue said no but added, “when North Korea threatens you, you don’t ask them to be more specific.”
According to a copy of testimony prepared for delivery later in the trial, Roberts indicated that he has “no recollection” of saying during the Jan. 27 conversation that relationships with the cable industry were going to get “complicated” or “very interesting.” He said he did recall commenting that he was disappointed and that, as “I had before, that I foresaw that the NFL was likely to continue to face difficulties persuading cable operators to provide NFLN, given that the addition of eight live games would add significantly to the price to distributors but not materially improve the overall appeal of its content to consumers.”
Roberts says Tagliabue responded that “I may not disagree with you. Perhaps the owners are making a mistake here. Your offer may be better. Sometimes the owners have to learn the hard way.”
(Comcast reportedly offered $300 million to $400 million for the eight primetime games.)
The hearing comes, coincidentally, as the contract is running out on Comcast’s carriage of NFLN April 30 and the operator has indicated to its subscribers that it will likely have to drop the network after that date if there is no deal.