DirecTV wins MLB deal; Dish, cable in game
EmptyCHANTILLY, Va. -- MLB awarded DirecTV the rights to its Extra Innings out-of-market subscription package -- and pitched veterans InDemand Networks and Dish Network to match the deal or get sent to the bleachers.
The seven-year deal could be worth $700 million a year to MLB if only DirecTV signed on, though DirecTV would pay substantially less if it didn't have an exclusive.
The deal, which had caught the ire of fans and lawmakers because of the possibility that it would lock out cable and Dish subscribers, was positioned Thursday as either an exclusive for DirecTV or a deal in which InDemand and Dish could renew their packages by paying the same amount and also committing to carrying the Baseball Channel.
There was no word whether either would agree to the deal, which MLB said had to be completed by month's end. The regular season begins April 1. Baseball executives in a conference call with reporters Thursday bristled at the suggestion that they were locking out fans or annoying lawmakers concerned that the DirecTV deal was noncompetitive.
The executives said that the negotiations were open for a long time and that the two incumbent companies could have stepped up to the plate and still can.
"The choice as to whether this package is on cable won't be ours but rather the cable operators," MLB executive vp Tim Brosnan said. But he and Bob Dupuy, president and COO of MLB, probably won't lose any sleep if they were in business with DirecTV only.
To reach agreement, Dish and the three MSOs that jointly operate InDemand -- Cox Communications, Time Warner Cable and Comcast Corp. -- would have to commit to carrying the long-rumored Baseball Channel. DirecTV will take a minority stake in the proposed 24/7 linear channel, which would give it about 15 million basic-tier subscribers when it is scheduled to launch sometime in 2009.
Robert Jacobson, president and CEO of In Demand, blasted MLB for cutting a "de facto exclusive deal -- including conditions for carriage that MLB and DirecTV designed to be impossible for cable and Dish to meet -- with one satellite operator and disenfranchise baseball fans in the 75 million multichannel households who do not subscribe to DirecTV."
Dish also released a statement responding to the DirecTV deal. "We have been asking Major League Baseball to make the package available a la carte so only those who choose to get the games today can continue to do so. ... DirecTV and MLB, as owners of the package, should not be able to line their pockets at the expense of consumers who don't want and won't watch the content."
MLB executives did acknowledge pressure from baseball fans and some lawmakers who were concerned about losing Extra Innings. DirecTV has an exclusive NFL Sunday Ticket package that is the envy of cable companies. That's why MLB offered the same deal to In Demand and Dish.
"We hoped it would alleviate the concerns because the product is being offered to those who have had the product," Dupuy said.
Baseball commissioner Bud Selig agreed. "I certainly hope this should help enormously," he said.
DirecTV COO Chase Carey said that with the open-ended nature of the agreement there was some "short-term uncertainty" that could affect some of DirecTV's plans. But he said the company would offer several enhancements to the existing package, including a channel where several games can be seen at the same time. He also said DirecTV was comfortable with either exclusive or nonexclusive rights.
Rep. Edward J. Markey, D-Mass., chairman of the House Telecommunications and Internet Committee, reacted with an announcement that he intends to review the agreement. "Without the benefit of knowing all the details, it's hard to know if this deal represents a curveball to consumers or a solid base hit for fans across the country," he said.