Analysis:  Comcast Pact, RedZone Channel May Trigger More NFL Network Distribution Deals

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With Comcast finally reaching an accord over positioning and pricing for the NFL Network last week, the question remains when will other recalcitrant operators huddle with the pro football league to discuss distribution deals.
Comcast chairman and CEO Brian Roberts and NFL commissioner Roger Goodell were both personally involved in the negotiations that ended a long-standing and litigious dance at the scrimmage line that had seen the operator migrate NFL Network to a sports tier, resulting in cases at the Federal Communications Commissions and in New York State Supreme Court. Comcast's old deal with the NFL Network -- which began airing an eight-game, late-season primetime slate in the 2006 season that lifted its license fee dramatically -- had ended on April 30.
The agreement was in step with a series of deals -- along with new pacts with Dish Network, DirecTV, CBS and Fox -- in recent weeks that were concluded by NFL executive vice president of media Steve Borstein.
The league is hopeful that the Comcast deal will provide a template for other operators to come on board, much like Time Warner Cable, Mediacom and others did last summer just weeks  after the leading distributor ended an impasse with Big 10 Network.
Under the new pact, NFL Network by August 1 will kick off on Comcast's Digital Classic, its second most widely penetrated package with 10.8 million subscribers. The distribution paydirt tally: almost 9 million more subs on Comcast and over 45 million in total for the pro football service.
Moreover, Comcast will likely position the NFL's new RedZone Channel, which showcases touchdowns and scoring opportunities during all Sunday afternoon games on the sports tier, which could drive sales during the fall and winter months.
Neither Goodell nor Roberts would discuss monthly subscriber license fees, which were said to be around 70 cents during the old contract, and somewhere between 40 and 50 cents under the new one, extending for nine years. One knowledgeable source narrowed the range to somewhere in the 41- to 43-cent area.
Goodell during a press conference said he hoped Comcast's pact would provide a game plan for other operators to get in the game -- Time Warner Cable, Charter, Cablevision and Suddenlink have been sitting on the distribution sidelines. The commissioner said be planned to reach out to Time Warner Cable. Neither party would comment on whether that had occurred by Friday.
Charter didn't return phone calls seeking comment.
For its part, Suddenlink posted the following on the FYI area of its Web site: "Given the recent news about a deal between Comcast and the NFL Network - which allows Comcast to carry the NFL Network as part of its digital service - we are following up with NFL executives to discuss what new options might now be available to Suddenlink and its customers. While we obviously cannot make promises at this point, we remain open to adding the NFL Network to our line up in a manner that is fair to all of our customers - and we will let everyone know if we are able to reach an agreement that allows us to do that."
A spokesman for the operator said its top programming executive had reached out to NFL Network representatives last week, but had yet to engage in conversation. Only one of three of the comments posted to the area on the Web site expressed interest in the service.
For his part, a Cablevision spokesman declined comment. In the past, Cablevision CEO James Dolan said the operator would only carry NFL Network if it had access to the pay-per-view Sunday Ticket package, which remains the exclusive province of DirecTV. It will be interesting to see if RedZone Channel will serve as a suitable substitute to jump-start negotiations with the New York area's predominant cable operator.
Goodell, during the conference call, said the RedZone Channel, is "a new way to create value and open up opportunities, similar to the arrangements with Brian."

It was something that evidently proved attractive to Roberts and Comcast. The leader of the No. 1 cable company said the operator was planning to position it on the sports tier: "In our view [RedZone Channel is] a logical replacement for NFL Network on the sports tier," he said. "We'll look to make a decision on that before the season."
It was unclear at press time if that positioning was contractually mandated by the new distribution pact.
The NFL's ability to proffer the RedZone service during the 2009 campaign emanated from the $4 million, four-year extension from 2011 through the 2014 seasons it reached with DirecTV in March and the two-year renewals it finalized with Sunday afternoon carriers Fox and CBS last week. Under those pacts, Fox and CBS gain cost certainty, as published reports peg the increases in the 1% to 2% range over the $712 million and $622 million they're paying annually under the current contract. Moreover, they both --CBS in 2013, Fox in 2014 -- added another Super Bowl to their programming and advertising arsenals.
Meanwhile, the league is also expected to try and renew its pact with Sunday-night carrier NBC. Speaking during the NFL's spring meetings in Ft. Lauderdale last week, Goodell said: "We've been in touch with NBC. They have a tremendous interest in continuing the relationship and we have an interest in continuing that relationship with NBC also. I think it has been a very positive relationship, so we will sit down and talk with them."
An extension with the Peacock would seem to defuse the notion of several published reports intimating that Versus, Comcast's national sports network, could get in on NFL game action anytime soon.
Asked during the press conference announcing the Comcast deal, Goodell said no determination had been made yet about adding two more games to the NFL regular-season, and if that would result in NFL Network ultimately presenting a full season's worth of games.
Such an expansion couldn't occur until 2012: NFL Network's current contract for its eight-game schedule expires after the 2011 season.

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