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 last week.
The 720,000-subscriber MSO, the tenth 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 sports-programming giant.
That new pact, similar to deals negotiated recently by Cox Communications Inc. and Charter Communications, reportedly calls for annual rate hikes in the 7% range — substantially less than the yearly 20% increases ESPN has levied — 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 medium-sized 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%," said McKenna, who also sits on the NCTC board. "The bad news is we're starting with a $2.50 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.
Cooperative members can pick and choose from the master carriage deals they want, or negotiate their own pacts.
Regarding Cable One's decision, an ESPN spokeswoman said, "It's great."
Other big NCTC members, such as Mediacom Communications Corp. and Cequel III, said they're still studying the deal points.
"We haven't made a decision yet," Mediacom chairman and CEO Rocco Commisso said. "But we clearly have the ability to enter into that deal. We haven't made up our mind as to what we are going to be doing."
Mediacom buys ESPN under the original NCTC deal, set to expire July 31, 2006. The new pact runs through 2014.
At Cequel III, spokesman Peter Abel said: "We need to review the details of the deal before making a final decision. That said, we're delighted that ESPN has recognized the value of NCTC members and is willing to offer us competitive rates comparable to other MSOs and entities of equivalent size."
Adelphia Communications Corp. is the NCTC's largest member, and it wasn't known if that MSO will participate in the co-op's new ESPN agreement.
The NCTC last week was putting together a summary of the new ESPN contract to send out to members, according to senior vice president of programming Frank Hughes. Along with distribution requirements, the contract stipulates adjacencies relating to adjoining channel positions for ESPN services, he said.
Galaxy Cablevision, with 72,000 subscribers, is checking to make sure it can meet the benchmarks regarding rollouts of additional ESPN channels, vice president of operations Larry Eby said. Galaxy has 200 headends, averaging 360 subscribers each.
"Since we've got so many headends, we've got to make sure that we can meet the requirements," Eby said. "We're got to weigh what we've got and make sure we can really — from a bandwidth perspective — launch any new services like [ESPN] Classic.
"Right now, we feel very positive about the deal and our ability to get in it."
Mike Farrell contributed to this story.