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March 26, 2007
MLB's Extra Innings Gets Senate Hearing
A Q&A with In Demand Pres/CEO Rob Jacobson, who will debate Baseball's unequal offer for its out-of-market games package tomorrow in D.C.
By Shirley Brady
The U.S. Senate Commerce Committee holds a hearing tomorrow looking into Major League Baseball's seven-year, $700 million deal with DirecTV for its Extra Innings out-of-market games package. The hearing will be chaired by Sen. John Kerry (D-Mass.), whose complaint to the FCC about DirecTV getting an exclusive on Extra Innings pushed MLB to (reluctantly) extend the package to its other incumbents, Dish Network and In Demand, which is owned by Comcast, Time Warner and Cox.
Rob Jacobson, president and CEO of In Demand, will be on the Hill at tomorrow's meeting. As cable's lead negotiator with MLB, he last week announced that In Demand's owners would match DirecTV's offer, including launching the Baseball Channel in 2009 to the same number of subscribers as DirecTV. MLB promptly rejected his offer.
Bob DuPuy, MLB COO Bob DuPuy commented today [AP], "This is not about In Demand or Dish not being able to match the DirecTV offer, it is about their willingness to do so. This was a negotiation at arms length over several months. DirecTV set the market. It is up to the other bidders to meet it.''
Jacobson will argue tomorrow that MLB isn't negotiating with cable (or with EchoStar, for that matter) in good faith before the Mar. 31 deadline to strike a deal. In Demand is posting fans' feedback on its website. We spoke with Jacobson after In Demand's Mar. 21 offer to MLB was rejected.
Cable360: What's your comment on this latest turn of events?
Jacobson: Major League Baseball was a unique negotiation in that for the first time a league expressly tied carriage of a yet-to-be-launched channel to continued carriage of a package. So that was unique.
Would you call it a curveball?
Yes, a curveball, if you’ll pardon the pun. It definitely created a very unique set of circumstances for us because we’re out there, we’re carrying this package today, and now we’re told that unless we agree to carry a channel which has not yet been launched that those customers will lose access to this package today. So it’s almost penal. If we don’t get a deal done you’re penalizing customers today for something you intend to do two years in the future. That’s a unique set of circumstances that we’ve never encountered before.
How can MLB say this is the exact same deal as DirecTV’s when it doesn’t include the opportunity to acquire a stake in the channel?
Well, yeah, that’s one of the big claims. How can you tell me it’s the same deal when you’re offering one person equity and you’re not offering it to the others? It just seems to be, objectively—and it’s hard for us to be objective, and it’s hard for them I guess to be objective—but on its face, if you look at it, one party’s getting equity that’s potentially going to be worth hundreds of millions of dollars. You’re not giving that to the other party, so how can you go out publicly and say you’re offering a consistent deal? It just flies in the face of logic. When you try to peel away all the emotion, it’s just not the same.
What’s your hope for Tuesday’s hearing? Do you think it will make any difference?
There’s a very obvious seriousness to a hearing before the United States Congress. Whether or not it will have any impact remains to be seen. There’s a very obvious seriousness about them wanting to hear what Major League Baseball and DirecTV have to say about this arrangement.
Earlier >>
3/21/07 MLB to Cable: "Strike 1!"
3/20/07 Cable Ops Prep For No MLB Deal
3/8/07 DirecTV/MLB Deal Announced
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