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April 1, 2007

MLB Extra Innings Deadline Extended

Update: No deal announced today; MLB COO Bob DuPuy told AP talks continue but "won't go on indefinitely."



The New York Times today reports that Major League Baseball extended contract negotiations through today (Sunday, Apr. 1) for In Demand and EchoStar's Dish Network to carry the Extra Innings out-of-market games package this season. The parties were still haggling at midnight last night, the original deadline set by MLB for a deal to be reached that would satisfy its terms of matching DirecTV's Extra Innings commitment.

That commitment—to not only pay a reported $700 million for a seven-year Extra Innings deal but also launch MLB's Baseball Channel to 80% of its subscriber base when it launches in 2009 (in return, getting a 20% stake in the channel)—proved to be a huge sticking point in negotiations with In Demand and EchoStar. But Tim Brosnan, MLB's EVP of business, tells the NY Times, “We continue to talk and we wouldn’t have extended the deadline [to Apr. 1] if we didn’t think we could bring everybody in.”

If In Demand, the cable consortium owned by Comcast, Time Warner and Cox Communications, fails to reach a deal, Extra Innings' subscription games package will be exclusive to satellite TV (whether EchoStar ponies up or not) and MLB's online streaming Web service, MLB.tv. Meanwhile, DirecTV is offering subscribers a free sneak peek at Extra Innings and its souped up MLB SuperFan package through Apr. 8.

Sports Business Daily reports that In Demand brought in some big guns on Friday—"senior level dealmakers" from Comcast's Philadelphia HQ—to participate in its negotiations with MLB.

"Cable has agreed to give the forthcoming [Baseball] channel the carriage of 80% of all digital basic subs, a sum baseball views as a proportional match to DirecTV and a key sticking point in prior negotiations," notes Sports Business Daily, citing sources on both sides of the negotiations. According to the report, baseball sources say there's a 50-50 chance of deal while cable sources are "slightly more pessimistic" about a deal being reached today.

"The key outstanding issue is In Demand’s pursuit of equity in the forthcoming channel," the report notes, echoing comments by In Demand president/CEO Rob Jacobson in a Q&A with Cable360 before last week's Senate hearing on MLB's proposed exclusive TV deal with DirecTV that would have shut out Extra Innings' other incumbent distributors. As Jacobson said of the Baseball Channel's exclusive offer of a stake to DirecTV, "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?"

If In Demand is going to change its tune and launch the channel to 80% of its owners' digital basic subscribers (and not just match the number of subs—15 million—that DirecTV is guaranteeing) then it naturally wants a piece of the action. MLB isn't keen to give up its 80% share of the Baseball Channel, so the pressure falls on DirecTV to dilute its 20% stake in the network so its competitors can participate. Whether DirecTV must decide today whether it can be convinced to give up its exclusive stake.

Earlier >>

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







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