NFL puts blitz on cable
Jerry Jones, the tough and outspoken owner of the Dallas Cowboys, isn’t afraid to pick a fight with the big guys -- witness his 1996 lawsuit that branded the NFL as an “illegal cartel.”
This time, though, he’s not only in sync with his fellow team owners, he’s leading the NFL charge.
The fight is with Big Cable for its uniform refusal to make the three-year-old NFL Network broadly available to consumers. And the battleground includes Jones’ home turf, Texas Stadium, where the Cowboys in less than two weeks play host to the Green Bay Packers in a much-anticipated game that, for most of the country, will be available only on the league’s 24/7 football channel.
“Sometimes, the Dallas Cowboys and the others don’t have the same lineup,” said Jones, who chairs the owners’ television committee. “But in this case, we’re all aligned. We’re totally committed to the long-term success of our network.”
At issue is the financial viability of that network, which on Thanksgiving Day will broadcast the first in its exclusive eight-game package. While the channel now reaches about 43 million homes, the league says it needs -- and deserves -- at least 70 million. And that means winning space in basic digital cable packages.
Comcast, Cablevision, Time Warner Cable and Charter, however, are balking at the NFL’s demand to be paid about 70 cents per subscriber for such carriage. That is more than popular cable channels such as CNN fetch -- a bold demand, cable operators say, from a network that offers eight live games each season.
The fight affects Southern California because Time Warner, which serves 1.9 million households -- or nearly half the homes in L.A., Orange, Riverside, San Bernardino and Santa Barbara counties -- has refused to carry the NFL Network.
“Right now, the NFL clearly is the underdog in the fight against Comcast and other big cable companies,” said Harold Feld, executive vice president with Media Access, a Washington public interest group that says big cable companies are discriminating against the NFL and other independent programmers. “It’s clear that [sports networks are] getting the snot beat out of them by the big cable companies and that’s not right.”
As part of its counterattack, the league is exhorting disgruntled fans to dump cable and hook up with such NFL Network-friendly providers as DirecTV, Dish Network, Verizon FIOS and AT&T; U-Verse. It also has entered the political arena, lobbying the FCC and key states for regulatory and legislative relief.
Cue Jones, who has emerged as point man in the league’s increasingly strident campaign to win this fight.
The 65-year-old oilman is using his Texas Stadium suite to wine and dine executives from companies that compete with cable. He is starring in commercials that urge fans to drop cable. And on Wednesday, he was in New York to support proposed regulations that would force arbitration when programmers can’t reach agreements with Big Apple cable systems.
It is “no accident,” Jones said, that the NFL Network’s schedule has NFC powerhouse Dallas hosting the resurgent Packers on Nov. 29.
“Certainly, that game being on our network was important to us,” Jones said. The fact that most NFL fans around the country won’t see it, he adds, “makes it pretty obvious that the cable companies don’t care about providing the best possible programming.”
When asked if the league eventually would try to sweeten the pot by pushing more NFL games onto the network, Jones said “that could be in the future.”
He also is supporting the NFL’s decision to lobby in Washington for regulatory relief -- a move that has raised eyebrows in the sports world.
“We’ve all scratched our heads on that one,” said a sports broadcasting executive who asked not to be identified because he has business dealings with the league. “The NFL is one of the bigger beneficiaries of an antitrust exemption, and it’s asking for government intervention? Somehow, that seems mind-boggling.”
Yet odds seem to be good that Uncle Sam could end up siding with the nation’s most powerful sports league.
Not surprisingly, the NFL’s fight with Big Cable is about which side will walk away with more money.
Location is everything on the cable and satellite television dial, where advertising rates are driven by the number of potential viewers available. ESPN, for example, is carried in basic cable packages that make it available in 96.5 million homes.
Cable system operators argue that there is a glut of sports channels seeking space in popular cable packages, and that consumers shouldn’t be forced to pay for programming that many will never watch.
MLB Network, for example, will be available in nearly 50 million cable and satellite homes when it goes live on Jan. 1, 2009. Hockey has a 24/7 channel, and NBA Commissioner David Stern wants to move NBA TV from digital sports tiers to more widely available cable packages.
The Big Ten Network, which is co-owned by Fox Cable Networks, is fighting for the same kind of placement in the eight states with Big Ten schools. The network bluntly has stated that its aggressive plan to broadcast more than 400 live athletic events annually “is not financially viable” if the channel is banished to a thinly distributed sports tier.
Executives at independent sports channels, meanwhile, complain that Comcast grants the cable world equivalent of 50-yard line seats to Versus, the Golf Channel and the regional sports networks owned by its parent company -- and then refuses to carry independent channels or relegates them to the digital sports tiers that can be the equivalent of seats in the nosebleed section.
“Unless you’re affiliated with a major cable operator or a major broadcaster, you don’t get in,” Feld said.
The NFL, however, appears poised to benefit from its FCC lobbying. A controversial rule that FCC Chairman Kevin J. Martin is expected to circulate could address a broad range of cable industry issues and also give independent sports channels more leverage in their fight with Big Cable.
NFL executives argue that government intervention is necessary because cable systems won’t enter substantive negotiations. Moreover, the league is advancing a winner-take-all, baseball-style arbitration system that would kick in when programmers and cable system operators reach an impasse.
“The problem we’ve been dealing with, and still are, is stonewalling by cable companies,” said Frank Hawkins, senior vice president of business affairs for the NFL. “What we’re interested in having is a forum where you can have your case heard by a neutral party who doesn’t have the incentive or ability to stonewall.”
Cable executives, meanwhile, acknowledge that thousands of customers are switching to satellite and telephone company video systems but that most of those defections are not because of the NFL Network.
Besides, these executives say, Congress and the courts would reject or reverse whatever rules Martin crafts.
Comcast, in a recent FCC filing, scoffed that “the NFL deserves a trophy for chutzpah for seeking regulatory favors. . . . The notion that the NFL needs help from the Commission -- or anyone else -- in negotiating its carriage deals is ludicrous.”
Whether the NFL underestimated cable company resistance -- or overestimated fan demand -- it is ratcheting up pressure on Big Cable.
Last season the league financed an ad campaign valued at $100 million that encouraged fans to deluge cable executives with faxes, e-mails and phone calls. Big Cable refused to budge, so several months ago, the league changed its tactics.
The NFL is lobbying hard in such state capitals as Austin, Texas, and Madison, Wis., where it is using the Dallas-Green Bay game to whip up fan support. The contest will be broadcast in each team’s primary local market but the rest of the country will have to turn to NFL Network.
That means about 300,000 Time Warner Cable subscribers in and around Austin won’t see the game. And legislators say they’re feeling the heat.
As a Texas lawmaker recently told the Associated Press, “I’ve had a lot more people contact me about NFL football the last two months instead of child protective services, windstorm insurance or worker’s compensation, which are frankly more important issues.”