I've been following some interesting aspects in the world of television broadcasting over the past few weeks. There are a number of little "wars" going on right now between different factions - cable companies vs. satellite providers; broadcast companies vs. cable companies; satellite providers vs. broadcast companies; networks vs. cable companies. The posturing and preening going on in television broadcasting right now is bordering on the absurd. I've shared some of my insights with some friends of mine who are part of a little group of Iowa Hawkeye fans who talk about Hawkeye sports and/or other things going on in the world.
A couple of the guys felt the information was pretty interesting and suggested I put it on my blog. One of the things that I've been talking with them about is the situation with the current fight that is pitting the NFL Network versus cable television companies.
The NFL Network is available in about 1/3 of the nation's homes right now, primarily over Dish Network and DirecTV, but also with cable providers Cox and Comcast. But the remaining large cable companies (Time-Warner, Cablevision, Charter Communications, Adelphia, Bright House and Mediacom) are balking at the demands the NFL is putting upon them to carry the network on their systems.
The NFL wants the network to be part of the cable provider's expanded basic service, while cable operators want it to be part of their digital service. Cable operators want the NFL Network and the upcoming Big Ten Network to be choices the viewers will make if they want the new networks or not.
The cable companies are already under fire from the U.S. Senate about rapidly rising basic cable rates. The proposed pay package the NFL Network is demanding from cable operators is causing a number of them to balk at the league's demands. Right now, the league is demanding .70 cents per subscriber from the cable companies (up over 300% from the initial demand of .20 cents a subscriber in 2004). And cable companies believe that's too high of a price for a network in which the pertinent content is broadcast only six weeks a year.
The NFL is continuing to have negotiations with cable companies - especially those in states where NFL teams are located. Case in point - Wisconsin. The NFL has designated that "home markets" can receive the NFL network game via over-the-air broadcasts.
However, in Wisconsin, the designated "home market" is Milwaukee and Green Bay, which effectively left the rest of the state out in the cold (so to speak) when Green Bay met Minnesota a couple of weeks ago. Packer fans proliferate the state of Wisconsin and the outcry was none louder than in Madison, a market that is three times the size of Green Bay and home to arguably more Packer fans than those in the Green Bay area.
Charter Communications, the local cable provider in Madison, has ceased negotiations with the NFL network saying that the league is "blackmailing" and "strong-arming" cable companies into paying the fees to show the games of interest. They, like other cable companies, are not willing to pay out more money that would, in turn, raise cable rates - again.
The director of communications for Charter said that the NFL is continuing to demand the network be part of an expanded basic plan, when the cable companies want it to be part of their digital package.
(Locally, here in the Quad Cities and across Iowa - I've heard that Mediacom is wanting to package the NFL network as part of the new sports tier of channels that include ESPNU, CSTV and the Fox College Sports channels. No word yet if ESPN Classic would be brought back as part of this package.)
Ironically, Charter was one of the first cable companies to carry the NFL network in 2004, only to drop the network when the NFL demanded that it be part of Charter's expanded basic cable package instead of part of the digital package Charter was offering subscribers to show the network.
Right now, ESPN gets $3.00 per subscriber for their basic service of ESPN, ESPN2 and ESPN News - by far the highest per subscriber fee charged to cable companies. At .70 cents a subscriber, the NFL network would be the fourth priciest cable network providers would carry.
The Wall Street Journal said that the NFL left about $400 million on the bargaining table with over-the-air networks during their last negotiations to be used in reserve for the six Thursday night and two Saturday regular season games the network is going to show each year for the next three years. If cable companies don't pick up the network, the NFL could be out as much as $250 million dollars.
And that doesn't seem to faze NFL owners who are showing solidarity behind the NFL's negotiations with cable companies. New England Patriots owner Robert Kraft recently told the Wall Street Journal that NFL owners have no problem waiting a year or two for positive results, clearly a sign the owners will stand firm in negotiations with the unsigned providers.
"There's a desire and a need for this," Kraft said. "I don't think we should sell our soul for a bowl of porridge in the short run."
It will be interesting to see who blinks first in this...
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