NBC & DirecTV Ink Olympics Deal

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NBC has signed up DirecTV Inc. and a number of cable
operators for its upcoming cable Olympic coverage, which will air on CNBC and MSNBC,
sources said last week.

DirecTV will become the second major distributor officially
on board for the package, which includes five Olympic Games, as well as carriage
extensions until 2008 for both CNBC and MSNBC, according to sources.

AT&T Broadband & Internet Services was the first
official taker of NBC's Olympic deal, which in that case also included retransmission
consent for NBC-owned TV stations. The AT&T Broadband-NBC Olympic pact was announced
back in June.

DirecTV's agreement with NBC is expected to be
announced soon, possibly this week. In other business last week, DirecTV announced that it
will offer FX as part its Total Choice package starting this month. FX will be available
to more than 5.3 million DirecTV homes.

As for the Olympics, NBC has closed charter deals with a
number of cable operators, aside from AT&T Broadband, that will be announced in the
next few weeks, officials said. Those deals will reportedly cover 40 million to 50 million
subscribers, a claim some operators scoffed at, since NBC won't specify which MSOs
have signed up so far for the Olympic package. The deadline to sign up for the charter
Olympic deal was Aug. 1.

Some operators, including the National Cable Television
Cooperative, believe the package is just too pricey at $1 a subscriber a year.

"The NCTC has declined NBC's offer and at this
point we're not planning an Olympic deal," said Frank Hughes, the co-op's
senior vice president of programming. "We pass. We just think it's
unrealistic."

DirecTV, which reaches 7.4 million homes in total, and NBC
officials last week declined to comment on any pending Olympic deal between them. But NBC
alluded to the pact in a press release last week about MSNBC's growing distribution.
In that release David Zaslav, president of NBC Cable Distribution, said MSNBC had recently
signed a deal with DirecTV.

Last week, while declining to comment specifically on
DirecTV in relation to the Olympics, Zaslav claimed that operators are responding
enthusiastically to the package, exceeding NBC's expectations. But he wouldn't
specify who was on board.

"We have over 100 deals that are signed, and
we're going to be making a big announcement in the next two weeks," Zaslav said.
"At this point, we have more than half of the industry signed up with a very large
number of additional subscribers in final draft and close to signature. We're very
pleased that this industry across the board -- MSOs, DBS, TVRO, SMATV and MMDS operators
-- have embraced the Olympics and renewed CNBC and MSNBC for the long term."

Under the charter deal, distributors have to ante up an
Olympic surcharge of 4.5 cents per subscriber, per month on both MSNBC and CNBC. That
comes out to just over $1 a year, per subscriber, over the full term of the eight-year
contract, to the year 2008.

On top of the Olympic surcharge, under the charter deal
distributors must also pay license-fee increases for both CNBC and MSNBC -- a nickel
monthly increase each for both networks the first year, and less after that, according to
sources.

MSOs who sign up for the package after Aug. 1 will have to
pay a bigger monthly Olympic surcharge for CNBC and MSNBC, seven cents instead of 4.5
cents, sources said. And the license-fee increases for the two cable networks will higher
than under the charter deal.

Some cable operators have balked at the Olympic surcharge,
and had complained that the Olympics would only be worth a dollar per subscriber each
year, if cable got the coverage exclusively. But NBC Cable officials had previously stated
that they planned to offer the Olympic package to all distributors, including DBS.

MSNBC now reaches 50.5 million subscribers, with
commitments to be in more than 66 million homes by the end of 2002. The AT&T Broadband
deal also included long-term renewals of CNBC and MSNBC.

NBC will reportedly air about 250 hours of Olympic coverage
for each of the five games, exclusively on CNBC and MSNBC. This will augment its primetime
and weekend coverage on the NBC broadcast network, starting with the 2000 Summer Olympics
in Sydney, Australia. Operators will also get local avails during the cable coverage of
the games.

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