Kerry pitches sit-down for MLB, cablers
EmptyWASHINGTON -- Sen. John Kerry, D-Mass., won a commitment from Major League Baseball and the cable industry Tuesday for a last-ditch, face-to-face meeting aimed at resolving differences over baseball's Extra Innings premium package before Opening Day.
Satellite TV leader DirecTV has exclusive rights to the out-of-market package, but baseball has offered competitors the chance to match that deal.
MLB president and COO Bob DuPuy and Robert Jacobson, president and CEO of In Demand -- the VOD proxy for cable companies Comcast Corp., Time Warner Cable and Cox Communications -- agreed to the meeting under pressure from the lawmaker during a Senate hearing that Kerry called to examine exclusive sports deals.
EchoStar Communications, the nation's second-largest satellite TV company, and DirecTV also might take part in the talks.
"It'd be better thing if the games were available to a bunch more people," Kerry said. "There are only four days until Opening Day (on Sunday), it seems like you could get a few extra innings out of baseball."
MLB and DirecTV announced a multiyear agreement March 8 for the Extra Innings subscription package that also guarantees basic-tier carriage of the Baseball Channel when it launches in 2009. EchoStar and In Demand were told they had until March 31 to decide whether they wanted to match that deal to be allowed to continue to offer the games to their subscribers.
But talks over the package broke down March 21 when In Demand and MLB could not come to terms over how the rates would be calculated and the cable group's desire to a "most favored nation" provision to determine comparability.
Meanwhile, DirecTV continues to have the package to itself. President and CEO Chase Carey said the satellite company had no problem with carrying Extra Innings even if it weren't exclusive, though that would affect some of the enhancements being designed. It also goes without saying that DirecTV would pay MLB less without exclusivity.
Kerry suggested that MLB leave everything as it was, with cable and EchoStar carrying the games as well as DirecTV, and let the issue of the Baseball Channel slide until the channel is ready for launch.
It was an idea that didn't seem to sit to well with DuPuy, who said the deal with DirecTV was a way to guarantee carriage of the Baseball Channel, which is said is "critical to our survival."
"We've seen what other leagues go through," he said. "There's no guarantee we'll get carriage."
The thought of further negotiations also appeared to vex Carey, who told the committee that DirecTV's patience eventually would run out.
"We do have some concern that this is a legitimate process to get to a legitimate end," he said. "We've taken he risk, and we've stepped up. We have a binding contract. This is not an open-ended contract."
Jacobson told the committee that he also wanted to see an end to the discussions but said In Demand couldn't make a deal that would have it pay a disproportionate amount per subscriber for the rights to baseball. He said the most recent deal MLB offered would have had them pay 51% of the cost for 39% of the subscribers.
Still, Jacobson said he was ready to restart negotiations. "I'm happy to come up with a date and time," he said.
DuPuy echoed that sentiment. "We hear your concerns," he said. "Our door is open."