Major League Baseball announced its $700 million, seven-year agreement with DirecTV on Thursday and said the deal contains a provision that allows its “Extra Innings” package of out-of-market games to remain on cable if the other incumbent providers agree to match the terms.
NEW YORK (AP) — Major League Baseball announced its $700 million, seven-year agreement with DirecTV on Thursday and said the deal contains a provision that allows its “Extra Innings” package of out-of-market games to remain on cable television if the other incumbent providers agree to match the terms.
The president of one of those providers, iN Demand’s Robert Jacobson, immediately said those terms were impossible for his company to agree to and called it a “de facto exclusive deal.”
The Federal Communications Commission has been investigating the talks between baseball and DirecTV, which have drawn the attention of Sen. John Kerry, D-Mass.
“I certainly would hope it would alleviate the concerns,” said Bob DuPuy, baseball’s chief operating officer.
“Extra Innings” had more than 500,000 television subscribers last year plus about 60 percent more on MLB.com, the sport’s Web site. DirecTV president Chase Carey says that there were about 230,000 subscribers to the “Extra Innings” package last year outside of DirecTV and estimated that just approximately 5,000 of that group would not have access DirecTV, a satellite service.
Baseball said the agreement, which must be approved by owners, includes a provision allowing the package to remain on iN Demand Networks LLC and EchoStar Communications Corp.’s Dish Network “at consistent rates and carriage requirements” if a deal can be worked out this month.
“In response to those concerns of our fans, baseball has negotiated with DirecTV to offer the package to the incumbents,” DuPuy said. “I hope that those fans who have been directing their concerns to us over the last several weeks will now encourage their cable carriers to in fact enlist for this package.”
DirecTV will make The Baseball Channel available when the network launches in 2009, and DirecTV will be a minority partner in the network.
“The provision also requires the incumbents to agree to carriage rights to the MLB Channel proportionally equivalent to DirecTV’s commitment,” baseball said in a statement. “Should the incumbents decide not to match DirecTV’s commitment, the MLB `Extra Innings’ package will be exclusive to DirecTV.”
That appears to mean Time Warner Entertainment-Advance/Newhouse Partnership, Comcast iN Demand Holdings Corp and Cox Communications Holdings Inc.—iN Demand’s owners—would have to agree to carry The Baseball Channel on the same tier as DirecTV and not a narrower one.
“We have an exclusive arrangement, if that’s where it ends up. If these guys take it up in this window, we have a non-exclusive arrangement that works for us,” Carey said. “It’s significantly less money for the non-exclusive arrangement.”
Jacobson said the deal contained “conditions for carriage that MLB and DirecTV designed to be impossible for cable and DISH to meet.” He said the agreement will “disenfranchise baseball fans in the 75 million multichannel households who do not subscribe to DirecTV” and “represents the height of disrespect and disregard for their loyal baseball fans.”
Baseball has said displaced subscribers could buy the package from MLB.com, although the signal is not as good in many cases.