NFL Network Is Still Plugging Holes

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Pigskin fans in markets served by Time Warner Cable, Cablevision Systems, Insight Communications and Charter Communications will most likely have to skip Thanksgiving dessert and head to a neighborhood watering hole if they want to watch the Denver Broncos against the Kansas City Chiefs on the NFL Network.

The National Football League’s television network and the four cable operators dug their cleats in the turf last week over distribution fees for the channel and its package of eight primetime games on Thursday and Saturday nights. The league-owned network is asking for a monthly license fee of 70 cents a subscriber for its service, up from 20 cents before the eight games became part of its roster.

Last January, Comcast, according to executives familiar with the negotiations, bid $2.4 billion over six seasons and offered an equity stake in the network now known as Versus for the package, before the league awarded the rights to its in-house channel.

Since that point, the NFL Network has been fighting to get wide, basic distribution before its season, in effect, kicks off on Thanksgiving Day.

But operators have been blocking that bid. As of press time last Friday — just five days before the NFL Network’s first live game — here’s a scorecard of the holes that opened up in the service’s distribution lineup:

Time Warner Cable: Will not carry the first game. Executive vice president of programming Fred Dressler said last Wednesday at the SportsBusiness Journal Sports Media & Technology summit in New York that it’s “100%” assured that the cable operator will not come to terms with the network before its primetime package kicks off on Nov. 23. Time Warner has steadfastly held the line and wants to offer the NFL Network on its low-penetrated sports tier, while the NFL Network continues to seeking analog basic distribution.

“It comes down to whether consumers will be allowed to pay for it discretely or whether it will be bundled into basic,” he added.

Cox Communications: Will carry games, but not on the basic tier. Senior vice president Bob Wilson, who also spoke at the conference, confirmed that the operator will offer NFL Network and its live games on its sports and information tier. He said that tier has about 30% penetration across all Cox subscribers and 60% penetration among Cox digital-cable homes.

Wilson would not reveal specifics about the agreement, but executives involved in NFL Network-cable operator negotiations said Cox and other distributors of the live game package are paying a surcharge for the games that’s more than double the approximately 20-cent license fee for the rest of the network’s programming.

Charter Communications: Off-air. The first cable operator to sign up with and carry the NFL Network in 2004 is in litigation with the service over the terms of that initial carriage deal. The network pulled its signal from Charter in December 2005 and filed a breach of contract suit against the operator in New York Supreme Court over contract language regarding distribution.

Executives at Charter — whose chairman, Paul Allen, owns the defending National Football Conference champion Seattle Seahawks — would only confirm that it is engaged in litigation with the network and plans to file a counterclaim. In August, the parties met with a mediator but were unsuccessful in efforts to work out their differences, according to Charter.

Insight Communications: Will not carry the games. Insight, which carries the NFL Network on its digital basic tier, has decided not to pay the additional surcharge to carry the game package. Representatives from Insight did not return phone calls by press time.

Cablevision Systems: Not likely to carry the first game. The operator doesn’t have a deal with the NFL Network and declined to comment on the matter.

Comcast: Will carry the eight games on its Digital Plus tier and sports tier in systems that already have the NFL Network, according to a spokeswoman. That does not include the recently acquired Adelphia and Time Warner Cable systems it picked up earlier this year.

Last week, though, the NFL disclosed that it filed suit in October in a New York State court to block Comcast from distributing NFL Network exclusively on a sports tier the nation’s largest cable operator plans to launch sometime in 2007. The disclosure about the suit, which remains sealed, came during a hearing in Washington, D.C., focusing on the distribution of its “NFL Sunday Ticket” out-of-market game package.

NFL Network president Steve Bornstein said during a network conference call last week that he was “not optimistic” that deals with Time Warner and other recalcitrant operators would be completed by Thanksgiving. He said the network will distribute the games to a little over 40 million subscribers.

“I’m always looking at the glass as half-full,” Bornstein said, adding that the network has 160 other cable distributors currently on board. “I believe I am offering a real good value to cable distributors … we are just hopeful that we can get 100% [distribution].”

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