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D* Going for MLB Extra Innings Exclusivity

post #1 of 859
Thread Starter 
http://www.sportsbusinessjournal.com...rticleId=53375

DIRECTV Swinging for MLB Exclusivity
The pay-TV industry has long envied DIRECTV for its exclusive carriage agreement with the National Football League for its NFL Sunday Ticket. Now, according to reports, the satcaster is eyeing Major League Baseball's Extra Innings to be the next professional sports programming package only available on DIRECTV.

A recent story in Sports Business Journal said DIRECTV is in advanced negotiations with MLB executives about acquiring exclusive carriage rights to the league's out-of-market Extra Innings package - a move that authors John Ourand and Eric Fisher said would be "a huge blow to the cable industry" and cause a stir on Capitol Hill. According to the story, unnamed sources from the league and DIRECTV confirmed that the two sides are negotiating a deal that admittedly still has a number of hurdles.

The league has been shopping the exclusive programming bundle to both cable and satellite providers during the past several weeks. Last year, most providers were offering the entire season for about $179.

The article said MLB and cable execs have been frustrated with Extra Innings' slow growth peaking at roughly 750,000 subs last season and teams were picking up individual payouts of about $2 million each. By comparison, SBJ said, the NFL's Sunday Ticket had nearly 2 million subs with DIRECTV paying the league close to $700 million per year through 2010.

With Congress offering a sympathetic ear to cable's recent (and long-term) complaints about DIRECTV's stronghold on professional football, some industry insiders with close ties to the negotiations for baseball expressed surprise that MLB would try to secure an exclusive deal, the article said.

http://www.skyreport.com/#Story2
post #2 of 859
i'm so happy i live near my bay area teams ...
post #3 of 859
This would completely suck! The major factor with ST have over 2 million subs is that the NFL is the most popular sport in the US and MLB is lagging behind. I would want more people to be able to get my product rather than less.
post #4 of 859
my momma said there would be days like this...
post #5 of 859
Quote:
Originally Posted by nikeykid View Post

i'm so happy i live near my bay area teams ...

Likewise, living in the NY metro area!
post #6 of 859
That would be awful. People that have cable or Dish Network should be able to get this package. I think MLB would be making a big mistake. MLB is not the NFL and they would not hav many people moving to DirecTV just for baseball. So MLB would lose many customers for this package.
post #7 of 859
This would stink. Then they would bost the rates like the do for Sunday Ticket.

Quote:
Originally Posted by Scott G View Post

That would be awful. People that have cable or Dish Network should be able to get this package. I think MLB would be making a big mistake. MLB is not the NFL and they would not hav many people moving to DirecTV just for baseball. So MLB would lose many customers for this package.
post #8 of 859
This would be awful. Still, at least MLB offers mlb.tv, which is how I've gotten my baseball fix the last couple of years. The NFL needs to hop on that trolly.
post #9 of 859
Quote:
Originally Posted by SixkillerNYC View Post

This would be awful. Still, at least MLB offers mlb.tv, which is how I've gotten my baseball fix the last couple of years. The NFL needs to hop on that trolly.

The NFL is doing fine with their exclusive deal with DirecTv for the out of market package.
post #10 of 859
Quote:
Originally Posted by Scott G View Post

That would be awful. People that have cable or Dish Network should be able to get this package. I think MLB would be making a big mistake. MLB is not the NFL and they would not hav many people moving to DirecTV just for baseball. So MLB would lose many customers for this package.

If it was only about having the maximum total number of subscribers to the out of market package, the NFL would not have an exclusive deal with DirecTv.

DirecTv pays a huge premium to the NFL for exclusive rights. MLB may decide that receiving an exclusive premium from D* makes more sense than having the MLB package available to anyone. We'll see what happens.
post #11 of 859
Quote:
Originally Posted by MnGuy View Post

The NFL is doing fine with their exclusive deal with DirecTv for the out of market package.

and if the NFL offered the same package to all the cable subs out there as they do for D*, that 2 million number would prolly be around 3-4 million.
post #12 of 859
It's not about how many subs you have, it's how much money the league (NFL or MLB) gets. In the end that's all they care about.

If the NFL thought they would make more money overall by offering ST to cable and Dish then you know they would. NFL isn't stupid.
Obviously MLB feels they will make more money by going exclusive. They don't care if the number of subs to EI goes down. If DirecTV is paying them more money then they made before with it available to cable then that is all they care about.

People don't seem to get the fact that these multi-billion dollar businesses don't do exclusive contracts for no reason. They do it to make the most money they feel they can. Period.
post #13 of 859
Quote:
Originally Posted by HDTVFanAtic View Post

http://www.sportsbusinessjournal.com...rticleId=53375
The article said MLB and cable execs have been frustrated with Extra Innings' slow growth peaking at roughly 750,000 subs last season and teams were picking up individual payouts of about $2 million each. By comparison, SBJ said, the NFL's Sunday Ticket had nearly 2 million subs with DIRECTV paying the league close to $700 million per year through 2010.
http://www.skyreport.com/#Story2

If MLB is so disappointed with the growth of MLB Extra Innings, why don't they stop shooting it in the foot all the time with their idiot blackout rules. I live in Boise, Idaho, several hundred miles from Seattle (about a 10 hour drive and I drive fast ) yet if I had MLB Extra Innings, I could not watch any Mariners game shown OTA in Seattle, even if the opposing teams network was showing it on satellite. I understand the rationale for blackouts but it seems only places in the reception area of Seattle OTA should be blacked out in these instances, Seattle TV stations don't come in so good here Things like this are why I do not subscribe to this package. BTW, does anyone have the subscriber numbers for the NHL Center Ice package (the only sports package I do subscribe to and have for 10 years now).
post #14 of 859
Quote:
Originally Posted by MnGuy View Post

If it was only about having the maximum total number of subscribers to the out of market package, the NFL would not have an exclusive deal with DirecTv.

Exactly. If too many viewers had access to and subscribed to ST, the value of the NFL's real source of income, the network contracts, would decrease.

Don't know if baseball exclusivity would have the same impact on network contracts.
post #15 of 859
Quote:
Originally Posted by bonscott87 View Post

It's not about how many subs you have, it's how much money the league (NFL or MLB) gets. In the end that's all they care about.

If the NFL thought they would make more money overall by offering ST to cable and Dish then you know they would. NFL isn't stupid.
Obviously MLB feels they will make more money by going exclusive. They don't care if the number of subs to EI goes down. If DirecTV is paying them more money then they made before with it available to cable then that is all they care about.

People don't seem to get the fact that these multi-billion dollar businesses don't do exclusive contracts for no reason. They do it to make the most money they feel they can. Period.

I agree with you 100%, i was basing my argument strictly on the number of subs.
post #16 of 859
Quote:
Originally Posted by MnGuy View Post

The NFL is doing fine with their exclusive deal with DirecTv for the out of market package.

I'm not doing fine, though
post #17 of 859
MLB Extra Innings is the MOST important criteria for my viewing. I would go ahead and upgrade to the new HD DVR tomorrow if this came to fruition, the only thing holding me back to this point is that I don't want to extend my two-year commitment until I see who offers the most HD long-term as part of the Extra Innings package.

While I know there are far fewer baseball addicts than NFL addicts, there are some of us. I think this would be a good strategy for D* -- if they can differentiate themselves based on sports programming there would be a subscriber base that would stick with them even if they do not find a competitive bundling solution.
post #18 of 859
its alll about the money, whether its raining or snowing or sunny...
post #19 of 859
There are just too many MLB games a week for this to be a good business decision for MLB. It weill also surely draw the ire of Congress which MLB does not need with the steriod issue and all. This would be a dumb move although I can see why D* would want it.
post #20 of 859
I suspect a few years down the road (certainly within a decade, probably a lot sooner) there will be a provider which offers every possible sports event on an NFLST-type platform. And it would be exclsuive.

I'd bet it would be a standalone operation -- perhaps co-owned by a couple of media giants. It could be satellite delivered, or fiber, or even cable.

Then all other sports could be stripped from basic packages of the majority of folks who don't want it -- and don't want to pay for it.

That would save the average non-sports-loving family a big chunk of $$$ -- dropping their bills by about a third. It would lessen the calls for a la carte, and it would also allow the networks to get out of the sports business, except for those sports which actually make money for them -- the NFL being the big leader, of course.

Perhaps the BCS games, World Series and NCAA basketball tournaments would stay on OTA as well. Maybe even a weekly NCAA footbal lor basketball game of the week, too. Various sports entities and teams might see an advantage is showing a handful of games OTA.

But they might not. MLB, NBA and NHL teams are showing far fewer OTA games than just a few years ago.

As I see it, the overwhelming majority of events will be on cable/DBS/telco -- as they are now. But only those viewers who really wanted them would have to pay for them.
post #21 of 859
Do all sports leagues have the NFL-type antitrust? I thought that was one of the reasons that the NFL could do it.
post #22 of 859
Quote:
Originally Posted by fredfa View Post

I suspect a few years down the road (certainly within a decade, probably a lot sooner) there will be a provider which offers every possible sports event on an NFLST-type platform. And it would be exclsuive.

I'd bet it would be a standalone operation -- perhaps co-owned by a couple of media giants. It could be satellite delivered, or fiber, or even cable.

Then all other sports could be stripped from basic packages of the majority of folks who don't want it -- and don't want to pay for it.

That would save the average non-sports-loving family a big chunk of $$$ -- dropping their bills by about a third. It would lessen the calls for a la carte, and it would also allow the networks to get out of the sports business, except for those sports which actually make money for them -- the NFL being the big leader, of course.

Perhaps the BCS games, World Series and NCAA basketball tournaments would stay on OTA as well. Maybe even a weekly NCAA footbal lor basketball game of the week, too. Various sports entities and teams might see an advantage is showing a handful of games OTA.

But they might not. MLB, NBA and NHL teams are showing far fewer OTA games than just a few years ago.

As I see it, the overwhelming majority of events will be on cable/DBS/telco -- as they are now. But only those viewers who really wanted them would have to pay for them.

I would love to see this happen, but I don't think it ever will because too much advertising money goes to the networks and they rely on that to survive. Its always going to be about how much money the networks make, not what is best for the consumer. If a single player can bring enough guaranteed money to the table (D* in the case of the NFL) then an exclusive agreement can be signed for out of market games, but I don't ever for see a time when only a single provider outside the existing providers will offer all sports.

I don't think you'll ever see the RSNs off cable/dbs/fois and sports off of the locals.

I would make me happy cause I could just pay for my sports and get rid of the rest of the BS
post #23 of 859
This would be great only if it means more HD games and the package finally adds OTA games to the schedule and gets rid of that terrible saturday afternoon blackout.
post #24 of 859
Quote:
Originally Posted by shagino View Post

Do all sports leagues have the NFL-type antitrust? I thought that was one of the reasons that the NFL could do it.

HUH? There is no antitrust. The NFL can sell it's games however they please. Same for MLB and any other sports league.

Congress just rattles it's sabre due to the cable lobby paying for their re-election. There is nothing legally wrong with MLB selling it's product (games) exclusive to another company.
post #25 of 859
Besides, MLB has a full anti-trust exemption since Judge Kenesaw Mountain Landis ruled so prior to him becoming the first MLB commissioner.

The NFL anti-trust law has only to do with television.
post #26 of 859
Quote:
Originally Posted by bonscott87 View Post


Congress just rattles it's sabre due to the cable lobby paying for their re-election. There is nothing legally wrong with MLB selling it's product (games) exclusive to another company.

I would bet that Congress would make a HUGE stink about MLB and an exclusive deal w/D*; far more than Specter has made for the NFL.

Willie
post #27 of 859
OK, someone please explain this to me...

There will never, ever, ever be ST or EI OTA. So in order to be able to view the Service (Out of Market Games) at all, anywhere, you have to buy a pay TV service. Why the hell would Congress be able to force a league to sell the Service to all pay TV services, rather than an Exclusive Provider?

Aren't they (shouldn't they) only (be) worried about more and more of the Local games moving away from Free OTA?
post #28 of 859
Quote:
Originally Posted by auribe14 View Post

Why the hell would Congress be able to force a league to sell the Service to all pay TV services, rather than an Exclusive Provider?

They can't, that's why our Congress is so messed up. It seems we have no bigger problems for our congressmen to address then stupid football and baseball games which they can't do anything about anyway.
post #29 of 859
Quote:
Originally Posted by jefbal99 View Post

I would love to see this happen, but I don't think it ever will because too much advertising money goes to the networks and they rely on that to survive. Its always going to be about how much money the networks make, not what is best for the consumer....


Very true, Jeff. But the networks don't make money, they lose it, the 100s of millions a year on virtually all their sports contracts (including the NFL, by the way).

The only sports contract I am aware of which actually makes money for its network seems to be the Olympics, and that barely breaks even.

Now there are accounting ways for a network to "justify" massive sports payouts (added local spots for CBS, NBC and Fox O&Os during NFL games, ability to wine and dine advertisers at Super Bowls, World Series, NCAA tournament games, etc. and promotional value for networks, for example) but the fact is the contracts lose money for the networks.

If there were a way for them to climb out from the escalating costs, they would love it.

I am just suggesting a process that makes sense on many different levels to the networks and the providers. It would probably make the sports leagues a lot less happy, because I am sure the rights fees would not continue their wild escalation if the networks were eliminated from the bidding.
post #30 of 859
Thread Starter 
I respectfully disagree Fredfa.

Just as advertisers need Network TV for its ability to quickly communicate a marketing message to the masses with reach and frequency, the networks have needed the same self-promotion platform to make viewers bite on the new shows they have to offer.

Last year I detailed the decade long demise of ABC once Disney purchased it thinking they could use the Disney/Touchstone studios to feed the pipeline. When that didn't work they cleared out PrimeTime with nothing but Who Wants to Be A Millionaire for up to 5 days a week - with out using it to hook viewers in new projects. When that collapsed, they were in ratings hell for literally 4-5 years until they were able to find 2 hits - Lost and Housewives - that they used the old fashion way - to move themselves out of the cellar.

NBC after loosing all it's must see TV found itself unable to promote new shows to the audience - and that's why it paid through the nose for SNF.

That's what CBS found when they lost the NFC in the mid-90s.

The networks need Sports (and specificially football) because they can at least try to hook new viewers on potential programs to fill out the rest of their schedules. It's much easier to get that 30 second promo hook to 15 Million people in a Football game than it is to 15 million people - 1.5 Million at a time - in 10 low ranked sitcom.

In a way, its no different than the advertisers needing to get the message across to a huge audience quickly.
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