Baseball Pitches New Network to Operators, EchoStar

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DirecTV and Major League Baseball cut a seven-year rights deal that gives the top direct-broadcast satellite provider rights to the MLB Extra Innings out-of-market subscription game package, but the league said cable operators, EchoStar Communications and other DirecTV rivals can still sell the package to subscribers if they agree to launch MLB’s new cable TV network.

Under the agreement, announced late Thursday, DirecTV will take a minority stake in MLB Channel, set to debut in 2009.

While observers had expected for weeks that MLB would sell exclusive rights to Extra Innings to DirecTV, the league said DirecTV rivals will still be able to market the package to their pay TV customers if the incumbents “agree to carriage rights to the MLB Channel proportionally equivalent to DirecTV’s commitment.”

The move essentially squeezes EchoStar and cable operators. Since DirecTV agreed to distribute the channel on its basic tier, the only way Time Warner Cable, Comcast and other DirecTV rivals could obtain access to Extra Innings and MLB Channel is if they also agree to launch the channel on their basic tiers.

“Should the incumbents decide not to match DirecTV’s commitment, the MLB Extra Innings package will be exclusive to DirecTV,” the league and the DBS provider wrote in a joint announcement.

MLB said deals with incumbents hoping to carry Extra Innings and MLB Channel also must be finalized by the end of the month.

“Major League Baseball has chosen to cut a de facto exclusive deal –- including conditions for carriage that MLB and DirecTV designed to be impossible for cable and Dish to meet -- with one satellite operator and disenfranchise baseball fans in the 75 million multichannel households who do not subscribe to DirecTV,” In Demand CEO Robert D. Jacobson said in a prepared statement.

“This decision represents the height of disrespect and disregard for their loyal baseball fans,” he added. “Thankfully, these fans will continue to have access to hundreds of games per year, including all of their in-market games and many out-of-market games, on broadcast and various cable networks.”

Cable operators have previously fought the idea of carrying niche sports channels on their most widely distributed tiers, as was demonstrated last year, when NFL Network pushed cable operators to place the channel on basic tiers.

"Without the benefit of knowing all of the details, it's hard to know if this deal represents a curve ball to consumers or a solid base hit for fans across the country,” said Rep. Ed Markey (D-Mass.), chairman of the House Telecommunications and the Internet Subcommittee, in a prepared statement. “I am eager to review the agreement in order to weigh its effect on baseball fans -- particularly displaced citizens of Red Sox Nation -- as well as on competition in the video-programming marketplace.”

And Sen. John Kerry (D-Mass.) -- who voiced his opposition to a potential exclusive DirecTV-MLB deal in late January -- said in a prepared statement, “I will review this deal to ensure that 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 that 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.”

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