Versus-DirecTV Remain At Distribution Impasse


More than two months after their contract ended, Versus and DirecTV remain at distribution loggerheads, their impasse showing no signs of subsiding.
However, a pair of external factors - negotiations toward a long-term expanded distribution package with Dish Network and the potential union of Comcast with NBC Universal - could exert pressures that facilitate a resolution.

Comcast's national sports service has been off the No. 1 DBS provider's air since their contract expired on Sept. 1. In the meantime, the parties have continued to negotiate a four-year deal, but remained locked in their stances over price and positioning, while Versus continues to ring up Nielsen advances.


The ratings amelioration has come without DirecTV's 14 million-plus homes, as much of that subscriber loss has been made up by sneak previews on a number of cable operators and Dish Network, which has provided Versus a full berth of its homes. As such, Versus' sub count has only declined to 71 million homes from 75 million, before the DirecTV drop.
The Dish free preview, though, is slated to end on Nov. 30. However, sources familiar with the negotiations indicate that Versus and Dish are moving toward a more permanent, expanded placement for the network. Before the preview, Dish carried Versus on its Classic Gold 250 package and above. The DBS provider also recently signed a deal with Professional Bull Riders Inc., one of Versus' prime properties, to become the official satellite television partner of the PBR
Versus president Jamie Davis would only say that "Dish has been great. We have a great relationship with them." Dish declined to address the distribution matter.
Ironically, DirecTV points to Dish's former positioning of Versus on the Classic Gold 250 package as one of the main reasons the parties can't steer a new carriage accord
On its Web site, DirecTV continues to present a message saying it was paying more than any other non-Comcast distributor and that Versus was seeking an additional 20% rate hike. It also said "Comcast forces DirecTV to make Versus available to a much larger portion of our customer base at our own expense than they require from other TV providers - most notably Dish Network."
After indicating all it is seeking from Comcast is "equal treatment," DirecTV also directs users to viewing alternatives to sports featured on Versus like the National Hockey League, college football, mixed martial arts, auto racing, bull riding and hunting and fishing fare.
For its part, Versus maintains the disconnect centers principally on DirecTV wanting to place it on a lower level of service, one that would give it access to 6 million down from 14.4 million.
Davis said Versus changed its proposal several weeks back, keeping pricing the same under the recently expired contract and capping the money DirecTV would have to pay, even as the DBS provider's overall subscriber rolls might grow.
"They rejected it; they have not countered it. It's more than a fair offer on the table; it's in their court," said Davis.
He said "the momentum for Versus is continuing," with the network's best September and October in its history. In September, the network's primetime viewership grew 26% in and 50% on the weekends, and rose 16% in primetime and 12% on weekend during October, even without DirecTV. He cited gains with Versus' coverage of the NHL, college football, the Professional Bull Riders, field sports and other programming, as the reasons for the Nielsen improvement.
After a record performance last season, Versus is off to fast start with the 2009-10 NHL regular season: household ratings are up 33%, while viewership improved 15%, according to Nielsen data.
On the college gridiron, Versus's household ratings lifted 100%, with a 49% increase in audience, season to date. As for the bulls, viewership of the first weekend of the 2009 PBR Finals on Oct. 31 and Nov. 1 jumped 141% and 103% over the same days with the 2008 event.
Asked about Davis' characterization that things were "status quo," a DirecTV spokesman said the company would not address specific points of the talks. "We believe the best way to negotiate is through face to face meeting and not through the media." He added that DirecTV is "speaking to senior level Comcast executives."
Both sides insist the negotiations continue to center solely on the Versus-DirecTV contretemps, and do not extend to other Comcast-owned properties, including some of its regional sports networks that are engaged in pricing disputes with DirecTV and are the subject of arbitration hearings.
Davis said that Versus has received 130,000 calls and emails about DirecTV, but couldn't provide a number on how many subscribers had changed their service to Dish or other providers over the disconnect.
"We've received a handful of calls in which customers said they made their decision [to leave] over Versus. The vast majority has stayed," said the DirecTV spokesman, adding that even without Versus, "DirecTV is still the leader in the clubhouse when it comes to sports programming."
Some observers in the sports TV community say another factor that could perhaps impact the Versus-DirecTV stalemate is Comcast's reported push to form a joint venture partnership with NBC Universal. They point to the potential for Versus to add replays of Notre Dame football games, and/or a pair of live Fighting Irish contests that NBC Sports can contractually shift to cable. Moreover, Versus would likely become one of NBC's stable of Olympics networks for London in 2012 (the deal wouldn't likely be closed in time for the upcoming Winter Games in Vancouver next February) and beyond, as expected to bid for the 2014 Olympics in Socchi, Russia and Rio De Janiero in 2016.
"DirecTV is playing a game of chicken. If Comcast gets NBCU, Versus could add some additional properties and become a stronger network. They could pull the offer and price might go up," said one executive familiar with the Comcast's thinking.
Sports media analyst John Mansell downplayed that notion. "That's possible, I suppose. This isn't YES and Cablevision or Cox and other operators with ESPN," he said, referring to a pair of notable sports battles earlier this decade. "Versus just isn't at that level of interest yet. Like all other carriage disputes it's a matter of price. I'm sure they'll eventually come to terms."
The DirecTV spokesman wouldn't engage: "That's all speculation," he said.
Mansell did say that a Comcast-NBC U union could benefit both parties on the sports side, pointing toGolf Channel sharing talent and facilities resources with NBC on the links game; regional sports networks teaming with NBC owned-and-operated stations, including local ad sales efforts; and the companies going after college conference and other major properties, a la ESPN-ABC.