New York -- Time Warner Cable executive vice president of programming Fred Dressler said the sports, TV and advertising communities aren’t the only ones keeping a close eye on the National Football League’s latest rounds of rights negotiations.
Speaking Tuesday on a panel at Sports Business Journal’s Sports Media & Technology 2004 meeting here, Dressler cited the respective 30%, 25% and 75% annual increases paid by Fox, CBS and DirecTV Inc. under their new multibillion-dollar NFL-rights deals as the kind that draw attention in Washington, D.C. -- and not necessarily from Redskins fans.
“Fox executives said they’re losing money now but they’re going to make money on the new deal. Everybody’s eyebrows are raised when CBS said it’s making money on the NFL, and they’ll make even more. Well, good luck,” Dressler said.
“But at the end of the day, [these increases] are what’s going to cause the government to take a look, to say this is or isn’t in the best interests of customers,” he added.
He later underlined his point by noting that other leagues and team owners are going to look at the NFL TV-rights deals and ask where their huge rights increases are.
Speaking about the possibility of a new national sports competitor, Dressler referenced fellow panelist and National Basketball Association executive VP Ed Desser.
“I’ll pick on Ed because he’s here,” Dressler said. “What if the NBA went with a new guy because they said they would treat them better? Now there are two networks with the same number of games with more costs. At the end of the day, that’s what’s going to raise government interference.”
Pushing the point, Dressler played devil’s advocate, arguing that networks say they’re adding value with high-definition presentation and video-on-demand opportunities. “That’s all just underbrush,” he said. “That’s evolution, like going from black-and-white to color to HD. It’s about the games.”
Containing costs was the motivating factor behind Time Warner Cable of New York City’s decision to partner with Major League Baseball’s New York Mets and Comcast Corp. on a regional sports network, according to Dressler, who claimed that the “Amazins’” network is a “one-off situation. The Mets came to us with a way to get the same product for less. That’s a benefit to us and our customers.”
After the panel, Multichannel News asked Dressler whether Time Warner had been approached by the NBA’s Rockets and MLB’s Astros in Houston, by MLB’s Twins in Minnesota or by the NBA’s Grizzlies in Memphis, Tenn., about becoming owners in proposed regional sports networks in those markets (in each case, the clubs renewed deals with the area FSN affiliates).
He said the clubs hadn’t approached the MSO, noting, “The economics are different when you’re an owner.”
When asked on the panel about the possibility of launching dedicated-team channels where Time Warner has a major cable presence -- an NFL New York Giants or New York Jets network, or an NFL Houston Texans channel -- like Comcast has with the NFL’s Dallas Cowboys, Dressler said his company would take a wait-and-see approach. “I don’t know the business or revenue models. I’m happy to copy it if it works,” he added.
Turning his attention to sports tiers, Dressler said Time Warner’s goal was to place costs against an array of product that people would be interested in buying. He added that there have not been enough networks yet to fill the tiers, although he mentioned that channels like college network ESPNU and MLB’s proposed service would be valuable additions.
“I think in the long run, [sports tiers] will pay off. It would help if something like NFL Network was on tier,” he said, alluding to panelist Adam Shaw, that network’s senior VP of distribution. “It’s premature to judge sports tiers because they have not been fully populated and marketed as such.”
Acknowledging the tough sports-tier positioning of fellow panelists Desser’s NBA TV and David Meister, chairman and CEO of The Tennis Channel, he said: “They knew the vision, which called for 8-10 networks. I don’t think they are surprised. Are they disappointed that things are not happening sooner? Yes.”
For his part, Meister said that thus far, the cost-value relationship of sports tiers has been a “flawed value proposition.”