NFL Network Blindsided by Comcast

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Comcast Corp. has thrown NFL Network for a distribution loss two months before its first live league game telecasts.

Comcast COO Steve Burke said the operator plans to place NFL Network on a digital tier of sports and information channels, which would limit its ability to be viewed by all 23 million of the operator’s subscribers. Such a sports tier would carry an extra monthly charge. Typically, no more than 10% of an operator’s subscribers sign up for one.

Burke said Comcast planned to put the NFL Network on a sports tier in systems it acquired this year from Time Warner and hasn’t ruled out tiering the service on all of its systems.

The NFL Network insists Comcast doesn’t have the right to offer the service on low-penetrated sports tiers.

The move could be devastating for the network, which launched in 2003 and hopes to gain basic analog carriage. That would make its package of Thursday- and Saturday-night pro games available to all Comcast subscribers.

The network secured the games purchase, valued at more than $300 million last January, thereby beating out Comcast, which planned to add the games to its OLN service, now called Versus.

To date, the network has signed up 33 million subscribers, in deals with direct-broadcast satellite providers EchoStar Communications Corp. and DirecTV Inc.; Comcast and a host of small cable operators.

Comcast’s move could embolden other large operators to hold out signing an NFL Network carriage deal to see if Comcast is successful in tiering the channel, Kagan Associates sports analyst John Mansell said. That could include Time Warner Cable, which dropped the NFL Network from several former Adelphia Communications Corp. and Comcast systems it acquired this year.

Burke, speaking last week at the Goldman Sachs Communacopia Conference in New York, said Comcast planned to place the NFL Network on a sports tier in former Time Warner systems acquired when the two companies split up Adelphia assets this summer. This would include former Adelphia systems in Minneapolis, Memphis, Jackson, Miss.; Louisiana (principally Shreveport and Monroe); and Florida (principally Cape Coral and St. Augustine). Comcast also gained control of Time Warner’s Houston system with the dissolution of Texas Cable Partners.

“We’re announcing we’re putting them on a sports tier in the Time Warner markets we just inherited,” Burke said. He had no comment about what Comcast would do in its own markets with the channel.

NFL Network executives could not be reached for comment, but spokesman Seth Palansky has said in the past that no operator has the right to place it on a sports tier.

Burke disputed that claim, though: “We obviously wouldn’t be doing that if we didn’t have the right to do that.” He added that the network hasn’t said Comcast doesn’t have the right to place it on a tier, only that they “will not give anybody the right in the future,” Burke said.

If Comcast is allowed to tier the service, Mansell said other large operators will most likely demand the same. “I don’t see operators making a big move [toward launching the NFL Network] this year,” Mansell said.

But sports consultant Neal Pilson believes eventually the network and operators will reach some accord, although it may come after NFL Network’s first telecast on Thanksgiving.

“Generally, these types of disputes — whether for the NFL Network or OLN looking to expand when they acquired the National Hockey League, or YES and its dispute with Cablevision — they tend to get settled,” he said. “Sometimes it’s last minute, sometimes it’s even after the fact, but most of them get settled.”

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