Sports Tug-of-War Persists

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Operators and regional sports networks have entered a new round in their
battle over licensing fees.

Fox Sports Net Midwest is on the verge of pulling its signal from Charter
Communications Inc.'s St. Louis system after the MSO refused a proposal that it
said would double the current license fee.

Meanwhile, New England Sports Network is negotiating with local operators to
move from a subscription pay tier to a traditional basic tier, which, industry
observers said, would inevitably force a hefty expanded-basic rate increase.

Charter and FSN Midwest have been negotiating a new licensing deal since the
current agreement expired in August, sources close to the situation said.

Fox had threatened to pull its signal Jan. 26 unless the dispute was settled,
according to those sources. At press time, no action had been taken.

FSN Midwest offers live games from such professional teams as Major League
Baseball's St. Louis Cardinals, the National Hockey League's St. Louis Blues and
the National Basketball Association's Indiana Pacers.

Representatives from Fox and Charter would not comment on the situation.
Charter CEO Jerry Kent told Broadcasting & Cable thatCharter
would not pull the network's signal, so if FSN Midwest wasn't there Saturday
morning, 'it's not because Charter did it.'

While it's unclear how much Fox wants per subscriber for the channel, sources
said the new deal was twice what the MSO paid under the prior agreement.

The dispute is common between MSOs, which want to rein in out-of-control
sports-rights fees and limit basic-rate increases, and sports programmers, which
feel that the ratings and advertising draw of local sports programming merit the
higher-than-average rates.

NESN is currently negotiating with AT&T Broadband to relaunch the service
on basic, representatives from both companies said.

AT&T Broadband, which has 2 million basic customers in the Boston area,
currently offers NESN for $9.95 per month.

It's unclear what rate NESN wants as a basic service. On average, regional
sports networks cost around $1 per subscriber.

NESN, which is owned by MLB's Boston Red Sox and the NHL's Boston Bruins,
competes in the Boston DMA with FSN New England.

AT&T Broadband Northeast vice president of communications Rick Jenkinson
said the MSO wants to have a deal completed before the Red Sox season opens in
April. He did not rule out the possibility of a blackout if a deal isn't
complete by then.