April 4, 2007
Batter Up! MLB, Cable Reach Extra Innings Agreement
By Shirley Brady
At 8:30pm ET In Demand Networks and Major League Baseball announced an agreement for continued carriage of the MLB Extra Innings subscription package on cable. The seven-year deal includes distribution of the MLB's Baseball Channel, which the league announced tonight will launch in Jan. 2009. Terms of the agreement were not announced.
Robert Jacobson, president and CEO of In Demand Networks—the consortium owned by Comcast, Cox and Time Warner Cable that negotiated the cable carriage on behalf of its owners and can extend to other cable operators—said in a statement this evening: "We couldn’t be happier that we have reached an agreement with Major League Baseball and are able to make these games available to baseball fans as we have for the past five years."
Comcast, Cox and Time Warner Cable can immediately offer the Extra Innings out-of-market games package for this season. In Demand will also offer the package to other cable operators, including its affiliates Cablevision, Charter, Mediacom and Insight Communications. The only catch: other cable operators can offer Extra Innings only if they also agree to launch the Baseball Channel.
In order for cable's deal to be done MLB announced this week that DirecTV had to approve. In Demand, for its part, sought an ownership stake in the startup network that would be comparable to the 20% stake that DirecTV received as part of its reported $700 million, seven-year Extra Innings contract.
According to a statement this evening from DirecTV president and CEO Chase Carey, the satellite TV provider maintains "a leadership equity position" in the channel that exceeds cable's cut of the channel, which implies it likely retained its 20% stake and still gets the best overall deal, in its view, if not the TV exclusive.
"We are extremely pleased with our revised agreement," said Carey. "It recognizes DirecTV's role in this process by providing us unique financial benefits in Extra Innings, a leadership equity position in the MLB Channel, an ability to develop expanded features available only to DirecTV customers as well as exclusivity of MLB Extra Innings against satellite and other key cable competitors."
Carey's statement alludes to the companies who aren't part of the new deal, namely EchoStar's Dish Network—the other incumbent distributor of Extra Innings, whose president and vice chairman Carl Vogel testified at the Senate Commerce committee inquiry last month—and presumably the "key cable competitors" of Verizon's FiOS TV and AT&T's U-verse.
MLB's channel will launch in 40 million homes, which MLB president and COO Bob DuPuy said accomplished the league's goal in extending its talks with cable this week and dropping the earlier deadline.
"Our chief goal throughout the process was to ensure that fans would have access to as many baseball games and as much baseball coverage as possible," said DuPuy.
"With this agreement, the MLB Channel will launch with an unprecedented platform," he added. "We are pleased with the launch of the MLB Channel to so many homes coupled with our agreement to extend the distribution of MLB Extra Innings with In Demand."
As Jacobson told Cable360, the Extra Innings negotiations were "unique ... in that for the first time a league expressly tied carriage of a yet-to-be-launched channel to continued carriage of a package."
DirecTV's deal for Extra Innings and ownership in the channel—a proposed exclusive that was challenged in a congressional hearing chaired by Sen. John Kerry—involved "equity that’s potentially going to be worth hundreds of millions of dollars," Jacobson added.
4/4 Online or On Cable, MLB Wins
4/3 MLB on Extra Innings: Let's Make a Deal
4/2 Kerry to MLB: "We're Waiting on You"
4/1 MLB Extra Innings Deadline Extended
3/30 Deadline Looms for MLB's Extra Innings
3/28 Hopes Fade for Cable/Baseball Deal
3/27 MLB Hearing Strikes Out
3/27 Baseball Battle Heads to the Hill
3/26 Q&A with In Demand President/CEO Rob Jacobson
3/21 MLB to Cable: "Strike 1!"
3/20 Cable Ops Prep for No MLB Deal