As Summer Sets, Two Sports Carriage Disputes Rise

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Two carriage disputes, one nationally and one in the New York DMA, involving sports networks have come into play during summer's dying days.

Comcast-owned Versus went dark on DirecTV when the parties contract expired Sept. 1, while Tennis Channel, presenting its inaugural coverage of the U.S. Open, remained stuck in the distribution net with the predominant distributor in the Big Apple environs, Cablevision.
Versus president Jamie Davis said the network's disengagement with DirecTV was about a positioning downgrade and the loss of some 6 million subscribers. Before the plug was pulled on Sept. 1, Versus, which had resided on the Total Choice Xtra package, counted 14 million DirecTV subs among its 75.5 million base.
For its part, the nation's No. 1 DBS provider said Versus was seeking a 20% price hike.
Davis, in an interview on Sept. 2, said: "Those increases aren't true. We're simply asking them to pay what the other providers are paying."
DirecTV countered later that day, saying that it offered to keep the channel up for a month at the current rate, which it says is "way above market." The DBS operator said Versus refused, "forcing us to take it down." Davis said the network wasn't called by the DBS operator late Monday that it was about to be "turned off."
What they do agree upon: as of press time Friday, the parties were not negotiating, although DirecTV indicated it at the time that it  would be "happy to carry Versus on terms that make sense for us and are at market."
During the Sept. 2 interview, Davis, noting that Versus had received "tens of thousands and calls and emails," asking where they can get the network, said the talks broke down over DirecTV wanting to reduce Versus to an "undefined," lesser level of service.
"DirecTV wanted to take Versus away from 6 million subscribers who were receiving it for no additional cost," said Davis. "That was simply not acceptable for us. We hope to resolve things amicably, but that's a non-starter."
DirecTV, in an email response later that day, wrote "we've asked for packaging rights similar to other distributors like Dish," which it says carries Versus on its AT250 tier and has about a 35% penetration rate. "Our contention is, if it's good for Dish, why isn't it good for us? At this [point], the deal is terminated and we are treating this as a new network, from scratch. So we're attempting to gauge the market and Dish seems like a good barometer."
Speaking of Dish, it stepped into the fray by offering a three-month free trial to Versus.
On Friday, Versus, in Texas, Wyoming and other newspapers serving Denver and Los Angeles, began running ads, depicting sports gear under a trash heap with copy reading "That's what DirecTV thinks of the sports you love." It also includes the logos of sports/leagues carried by Versus, while stating that the Sept. 12 college football game between No. 2 Texas and Wyoming was "directly scrapped."
The ad riffs on DirecTV's opening salvo after the disconnect, when the carrier called the network's push for a price increase "simply piggish," while labeling the network as "basically a paid programming and infomercial channel with occasional sporting events of interest."
Davis, during his interview, took umbrage at the DirecTV pejoratives about Versus programming: "If the quote-unquote 'leader in sports' considers the Stanley Cup playoffs and Lance Armstrong's comeback as paid programming and infomercials, then I think the average fan knows they're not the real 'leader in sports.' That's an insult to all the fans of those sports."
The loss of carriage comes at an inopportune time for Versus, which said it is the fastest-growing sports network among viewers both in primetime and total day. Not only will it televise the aforementioned college football game and other key collegiate pigsking contests, but it has upcoming Indy Car Series races, a WEC fight on Oct. 10 and the start of the National Hockey League season, coming off best postseason from a viewership perspective in a decade, Oct. 1.
The timing wasn't good for Tennis Channel either in its battle with Cablevision. Tennis, which long has been seeking carriage beyond sports tier positioning with the Bethpage, N.Y.-based operator, on Aug. 17, took ads in New York area newspapers, stating "Thanks For Nothing Cablevision" over an image of a tennis racket smashing a cable box. Copy inveighed Cablevision for dropping "the ball by preventing your subscribers from seeing Tennis Channel's round-the-clock coverage of the U.S. Open," while pointing consumers toward DirecTV, Dish and Verizon FiOS to gain access.
Long Island's top newspaper Newsday, owned by Cablevision, did not run the ad. Cablevision, in a statement at the time, said: "The Tennis Channel ads are nasty, unfair and intentionally misleading, and we don't think anyone should carry them." It also ran an ad in Newsday pointing out that tennis fans could still get their fill of the Open via telecasts on CBS and ESPN2.
Then on Aug. 26, Cablevision fired a deeper approach shot of its own: it had become a member of the National Cable Television Cooperative and was availing itself of the co-op's contract with Tennis, calling for sports tier placement. Cablevision announced that it wanted Tennis to authorize its signal, so it could launch the service in both standard and high-definition formats on Aug. 28, three days before the 2009 Open was set to toss up its first serve. It also said it would make its iO Sports Pak, which houses 15 other sports networks and retails for $5.95 monthly, available for free over the next month.
Tennis, though, said it has legal issues with Cablevision's unilaterally putting out a press release about its wont to launch the service and that it wasn't given a 30-day notification period to do so.
For its part, NCTC, which called the contract "enforceable and valid," said it was unaware of any previous launch request where Tennis Channel delayed authorization for 30 days.
Tennis CEO Ken Solomon, speaking to CNBC from Flushing Meadows minutes before the tournament began and later that night on Fox Business Network, reiterated the network's position that it didn't have a deal and that it wanted to continue to negotiate.
Solomon said Tennis -- which presents the coverage of the sport year-round, including all four Grand Slams, plus original lifestyle programming, all in HD -- deserves to be seen by a "broad range" of viewers and that positioning on Cablevision's iO Sport Pak would only put it before 3% of the MSO's subscriber base, which totals around 3.1 million video customers. He said that's "not right for the U.S. Open."
With a reported license fee of around 15 cents per subscriber per month, Tennis' business model calls for penetration levels in the 40%-60% range.
Subsequently, Cablevision noted again that it has "a valid agreement that will immediately make the Tennis Channel available to any Cablevision customer who wants it. The Tennis Channel is continuing to claim a technicality allows it to delay the launch by a few weeks, and is refusing to do the right thing by authorizing Cablevision to receive its signal. Any further delay by the Tennis Channel is at the expense of New York-area tennis fans. Fortunately, Cablevision customers can already view more than 130 hours of the best live U.S. Open coverage on CBS and ESPN."
Evidently, that's what Cablevision subscribers will get to see over the course of the Grand Slam fortnight, as Tennis issued the following statement on Sept. 1, putting the contractual and timining issues in the operator's court. "Cablevision has taken a step that raises serious problems for all cable programmers. We are sorting out these issues and will decide what steps to take when we are ready to do so," Tennis said. "They are too important to the future of cable programming to be governed by the immediacy of the U.S. Open, as much as we would like to help people see it. Cablevision's decision to wait until just before the US Open began to demand carriage under the NCTC agreement makes it responsible for this situation; it could have given us notice of its intention to do so well before now, so that the questions could have been addressed and resolved in advance."
On Friday, nothing had changed in the matter of distribution discussions and carriage, or more pointedly the lack thereof.

As such, observers expected the next play to be struck around Sept. 25, when the 30-day notification period expires.

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