New York -- In a major sports pay-per-view coup for cable,
Viewer's Choice has reached a multiyear distribution agreement with the National
Basketball Association to offer its "NBA League Pass" out-of-market subscription
package to digital-cable subscribers.
Previously the exclusive domain of direct-broadcast
satellite services, the NBA deal will allow operators to compete with DirecTV Inc. for
sports fans' PPV dollars - although very few systems will initially have the channel
capacity to offer the 1,000-plus-game package.
"Hopefully, the deal means that the competitive
playing field is becoming more level, and that cable can get the kind of product that will
help it to maintain its current subscriber base," Viewer's Choice senior vice
president of distribution and product development Rob Jacobson said.
Viewer's Choice will distribute the games via its
33-channel digital-PPV service, although it is currently in discussions to add an
additional transponder and expand its channel lineup.
Systems will have to clear as many as 12 channels for the
package. The upcoming NBA season begins in November and runs through April.
It's unclear how many operators will actually be able to
offer the multichannel package. Currently, only slightly more than 2 million households
have access to digital technology, but only about one-half of those have enough PPV
channels to distribute the games.
Nevertheless, the deal is significant for cable and
Viewer's Choice, which have been pursuing the DBS-exclusive professional-sports packages
for years. The NBA and other pro-sports packages have been major acquisition tools for the
DBS industry, luring sports fans away from cable.
"This agreement demonstrates that the cable industry
is indeed committed to offering a competitive and compelling lineup of high-profile
subscription programming designed to bring greater value to consumers," Viewer's
Choice president Mindy Herman said.
The league - coming off its first-ever-abbreviated regular
season last year due to a six-month owners' lockout - pitched the package to several cable
operators last fall, but it was unable to come to any agreement.
However, cable's aggressive push toward digital technology
convinced the league to offer its out-of-market package, NBA Television and New Media
Ventures president Ed Desser said.
"The key change was that digital was no longer a
prognostication, but a reality, and there are operators that are actually offering digital
technology," Desser said. "As we have always said, we're platform-agnostic. It
was never a point of cable being bad and satellite being that much better."
And with such a potentially small digital universe, Desser
wasn't concerned about cable cannibalizing the performance of its NBC broadcast and Turner
Sports cable deals.
"While we recognize that it isn't without total
impact, we're comfortable that the impact will be very small," Desser said.
"What we want to do is balance the distribution among all platforms."
While analog systems will have access to the package,
industry executives don't believe any have the channel capacity to offer all of the games.
"We don't expect [analog carriage] to be very
common," Desser said. "I don't think there will be many 450-megahertz systems
that will be able to clear a dozen or so channels a night."
Cable operators concurred. "We'll evaluate it, but
it's difficult to carry without digital," Media General Cable PPV director Ted
Hodgins said. "I do think you'll see more operators move to digital very quickly, and
those with digital will see the demand for boxes increase."
Industry executives are also hopeful that the package will
provide significant incremental revenue to the PPV business. Last season, NBA League Pass
on DBS pulled about 425,000 subscribers and earned around $60 million, according to The
Carmel Group. Industry sources, however, said the packages have been marginally profitable
for the DBS services.
Desser believes that the package could draw a significant
number of cable subscribers, particularly as viewers become more aware of its
"This is a product that our fans like because it gives
them the ability to watch any game they choose," he said. "There are a number of
urban areas where it's not possible to get dish access, so this opens up possibilities for
Viewer's Choice will offer the regular-season package at a
suggested retail price of $169. Cable operators also plan to make available a special
"early bird" pricing of $149 until Sept. 30.
The deal is a major coup for Viewer's Choice and Herman,
who said the network will continue to pursue cable out-of-market deals with the other
"This is the first step in terms of leveling the
playing field with DBS," she said. "Once we're able to level the playing field,
then we want to create new and innovative programming for the industry."