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NYT Columnist: NFL Network Demands ‘A Lot for a Little’

The high cost of cable programming (particularly sports) is one of the biggest economic pressures affecting cable distributors and, whether they realize it or not, cable customers. It’s safe to say most customers don’t realize or care that their cable providers have to purchase the channels delivered into their homes. They just want to turn on their TVs and watch The Closer, Project Runway and SportsCenter. However, behind-the-scenes negotiations about how much cable providers pay to carry networks does directly affect cable customers—smack dab in the wallet. So we applaud pieces like Richard Sandomir’s column in today’s New York Times (“Network is Counting on Fans to Pay a Lot for a Little”) that reveal the direct link between the prices cable networks charge for distribution and the price cable customers in turn pay.

Sports programming is by far the most expensive of all categories of programming. And, as Sandomir points out, the NFL Network’s determination to extract hundreds of millions of dollars from cable operators and cable customers for eight NFL games illustrates how the aggressive demands of some networks directly impact consumers: "...the league wants cable operators to swallow a large fee, which would inevitably find its way to consumers."

The NFL Network, the television progeny of a league that knows better than all others how to mint money, is overreaching in its tough-minded campaign to prove its indispensability to fans in the cable TV universe. The network is overselling the value of its eight-game Thursday-and-Saturday schedule, which will not begin until Thanksgiving. It is clearly in love with what it is offering. You can tell by what it is charging. Basic arithmetic shows that at the rate it is demanding, at least 70 cents a subscriber every month, the NFL Network would amass $756 million in revenue if it were fully distributed to 90 million cable homes.

That is an astonishingly steep value to place on eight games -- which will be simulcast on local stations in the teams’ markets -- and an array of very good studio, news and archival programs. Still, that’s 357 days without games.

Sports programming is certainly popular, and cable distributors want and need to deliver as much of it as possible to appeal to the demands of their customers. Thus the abundance of sports networks on the typical cable TV line-up—networks like ESPN, ESPN2, FSN regional networks, Speed, Golf Channel, Tennis Channel and NBA TV, not to mention all of the sports on TNT, TBS and the broadcast networks. In fact, cable customers already can see more than 300 college and pro football games each season. In the case of NFL Network, Cox Communications was one of the early supporters of the channel; we’ve provided it to the vast majority of our customers for more than a year. We believe our carriage contract allows us to deliver the eight additional games and are working with NFL Network on the specifics. We want to provide our customers these games and are doing everything in our power to be able to deliver them—at a price that’s fair for our customers and in line with the value of this handful of games.

One last point: We do have one quibble with Sandomir’s column. He refers to digital sports tiers as “little-viewed flops.” Well, that has certainly not been our experience; Cox Digital Cable’s Sports & Info tier (on which NFL Network is distributed) is very popular and is purchased by nearly two-thirds of our digital customers.

Posted on September 20, 2006 12:38 PM | Comments (0)

« ‘DirecTV Simply Can’t Keep Up’ | Main | Comcast Weighs in on Sports Programming Costs: ‘There is a Sea Change Occurring’ »

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