Baseball deal with DirecTV ‘imminent’
A proposed deal by Major League Baseball that would give its Extra Innings pay package exclusively to DirecTV “is imminent,” according to two sources close to the negotiations, and could be announced as soon as today.
The deal, in which DirecTV would pay MLB $100 million a year over seven years, has been mired in controversy since it was first reported in January. But with opening day only a few weeks away, there is a growing sense of urgency.
Meanwhile, another source close to the negotiations said a recent counteroffer by In Demand -- the cable pay package provider that shared the rights to Extra Innings for the last five seasons -- plus one by satellite provider EchoStar, which owns Dish Network, “came too late in the game.”
In Demand’s counteroffer, which did not ask for exclusivity, matched DirecTV’s offer.
Up until now, Extra Innings has offered up to 60 regular-season, out-of-market games a week on cable, through the In Demand service, as well as DirecTV and Dish Network.
Last season, about 270,000 of the approximately 500,000 Extra Innings subscribers were DirecTV customers.
It was the exclusivity of the proposed deal that sparked protests from thousands of fans, particularly those of the Boston Red Sox, who either don’t want to switch from cable or are unable to get a DirecTV signal. In one fan’s case, trees on a neighbor’s property blocked the signal. Another fan said his apartment’s landlord would not allow a satellite dish to be installed.
The protests caught the attention of Sen. John Kerry (D-Mass.), a Senate Commerce Committee member. Last month, he asked the Federal Communications Commission to investigate the proposed deal. That inquiry is believed to be ongoing as of Wednesday.
Announcement of the DirecTV deal has been expected for weeks. Baseball officials, when asked about the delay, have said only that details still had to be worked out to make the deal more responsive to fans, yet declined to elaborate.
When asked if the FCC inquiry was a reason for the delay, the officials would not comment.
Kerry also was seeking to schedule a commerce committee hearing on the issue and had asked baseball officials and DirecTV to hold off announcing anything, spokesman Vincent Morris said.
A source close to the deal confirmed that such a request was received but said it would not be honored because the regular season starts April 1 and it is unlikely a hearing could be scheduled in time.
Baseball officials appear to be undeterred, even amid equally lucrative counteroffers. Yet the negotiations over the last month have not been easy.
One of the sources close to the talks said, “It’s been two steps forward and one backward.”
According to a company spokesperson, the In Demand offer matched or exceeded DirecTV’s offer, including financial terms of the deal as well as distribution of the new Baseball Channel, scheduled to be launched in 2009. Distribution of this channel is believed to be the crux of the issue for MLB.
Robert Jacobson, president and chief executive of In Demand, said the proposed MLB deal “is stunning in its disregard for baseball fans.”
EchoStar issued a statement saying, “The line has been crossed. On behalf of more than 13 million Dish Network subscribers, EchoStar is taking a stand on sports exclusives. When our customers are suddenly cut off from watching their favorite sports teams on TV, it is time to ask whether the market is working. This is both anti-competitive and anti-consumer.”
Chase Carey, DirecTV’s president and chief executive, sent a seven-page letter to the FCC on Friday in response to the agency’s inquiry and promised that no consumer will be denied.
“Consumers switching from cable to DirecTV will be provided with free equipment and free installation,” he wrote the FCC. “The small number of 2006 Extra Innings subscribers who cannot receive DirecTV -- estimated to be approximately 5,000 nationwide -- will have access through mlb.com.” He was referring to a $79 yearlong package that provides video-streamed games.
Baseball’s stance is equally clear. Commissioner Bud Selig, attending spring training games in Phoenix over the weekend, told reporters the controversy over the deal is “ridiculous.”
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