With news that a New York state judge has ruled that Comcast Corp. (NASDAQ:CMCSA) can finally move the NFL Network from basic digital cable platforms to a more expensive digital sports tier, does this signal a new era of pay TV for sports? Maybe.
This is special territory the monster cable operator has been angling for since it and the league-owned network couldn't reach agreement to place National Football League games on the Comcast-owned Versus network before last season.
The NFL in January 2006 rejected Comcast's offer of about $400 million a year for just eight regular-season games to be put on Versus, which already carries National Hockey League games and which Comcast was hoping it could build into a network to rival Walt Disney Co.'s (NYSE: DIS) ESPN. Instead, the NFL chose to place the eight games on its own nascent network, thus forcing cable operators to find room for it to avoid the wrath of football fans.
If the ruling of Judge Bernard Fried is upheld (the league is appealing), it means the NFL Network would only be available for Comcast customers willing to pay an extra $5 a month on what most customers already consider exorbitant cable bills to see those eight games per year.
Cable companies like the arrangement because they believe customers with basic digital shouldn't be forced to pay for what a select group of sports nuts wants.
With the explosion in popularity of fantasy football leagues, fans usually will do almost anything to see every single NFL game.
And rival cable operators such as Time Warner Cable (NYSE:TWC), Cablevision Systems Corp. (NYSE: CVC) and Charter Communications (NASDAQ:CHTR), none of which offered the NFL Network last season, will now seek the same right to carry the network on a sports tier if Judge Fried sides with Comcast on appeal.
Is it fair to consumers? Only they can answer with their wallets.
The even bigger question is how long will it take before all NFL games are pay television only? The answer: not long.
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Reader Comments (Page 1 of 1)
5-16-2007 @ 4:12PM
S. Goodman said...
I hope the cable companies charge for the NFL. But give me the option to drop the NFL and boy will I ever do so. I pay too much for cable now. I won't pay one cent for additonal sport coverage. At sixty eight, I rather do, than watch.
5-16-2007 @ 4:20PM
davylightning said...
The cable companies will cave as they start to lose serious market share to DirecTV and DISH. They can claim that it's not fair to most viewers, but since the NFL is by far the biggest sports attraction, they know full well they're not dealing with a minor percentage of their audience. It also wouldn't take more than a few percentage points of viewer loss to affect their bottom line. This is just a high stakes game of chicken.