Comcast & NFL Mediation

[PatsWickedPissah]

http://www.multichannel.com/article/CA6575978.html

Parties Making Arrangements For Meeting Over NFL Network's Carriage Terms
By Ted Hearn -- Multichannel News, 7/7/2008 10:34:00 AM

Washington -- Comcast Corp. and the National Football League have agreed to try to settle their legal dispute over carriage terms of the NFL Network out of court by turning to a mediator, both sides confirmed last week.

The agreement to rely on mediation came at the request of New York State Judge Bernard Fried in April. Fried, who ruled in favor of Comcast in May 2007 in a suit field by the NFL, was reversed by a higher state court in February. The case was returned to Fried's court.

The NFL sued Comcast in October 2006 for placing the NFL Network on a lightly viewed sports tier on recently acquired systems from Adelphia Communications.

After Fried's ruling seven months later, Comcast put the NFL Network on a sports tier on nearly all 600 systems. Comcast claimed it could do that under an August 2004 contract related to Comcast's options when it did not obtain the rights to distribute a package of out-of-market NFL games or a number of nationally televised NFL games by July 31, 2006.

The mediation will focus on whether Comcast had a contractual right to place the NFL Network on a sports tier that around 2 million of Comcast's 24.7 million subscribers buy for about $5 to $7 per month.

The NFL has refused to suspend its carriage discrimination complaint against Comcast at the FCC for the duration of the mediation. The complaint accused Comcast of favoring company-owned sports networks Golf Channel and Versus over independent channels like the NFL Network. Comcast denied the charges in a June 20 filing at the FCC.

"While we are prepared to agree to mediation of the contract language dispute between us and Comcast, we expressly told the court in NY that we would not stay the FCC proceeding – which raises major issues of federal communications policy – during the mediation. Comcast is trying to persuade the FCC to stay it, but we see no good reason to do so – especially because Comcast doesn't deny that it treats NFLN differently than sports channels that it owns," said NFL spokesman Dan Masonson.

 

[jmt57]

Interesting that Comcast (and Time-Warner) have steadfastly refused offers of arbitration more than once with the NFL, but once the NFLN announces an agreeent with espn, Comcast is now suddenly willing to settle the dispute with a mediator.

 

[PromisedLand]

Interesting that Comcast (and Time-Warner) have steadfastly refused offers of arbitration more than once with the NFL, but once the NFLN announces an agreeent with espn, Comcast is now suddenly willing to settle the dispute with a mediator.

For me and anyone else who didn't hear about the NFLN-ESPN agreement, what is it and how does it affect the situation?

 

[MoLewisrocks]

Sounds to me like advantage NFL. The original decision was overturned, and that generally happens when the judges rationale didn't match up with the contract and case law - and the mediator will likely come to the same conclusion an appeals court did. I think the NFL was standing on principle as much as anything, and Comcast thought they could simply force the newcomer to adapt to suit theirs.

I have a feeling the discussions with ESPN were what made mediation seem a more reasonable course. The alternative for Comcast is Disney's stick to wield over them just grows and the NFL borrows it to beat Comcast into submission. The alternative for the NFL is indirectly giving a stake in their network to the parent company of the network they hoped to replace where football is concerned.

For me and anyone else who didn't hear about the NFLN-ESPN agreement, what is it and how does it affect the situation?

I don't think it was a done deal but the NFL is in discussions with Disney about the potential to broadcast NFLN over the lowly rated ESPN Classic station. That would make NFLN as with all of Disney's broadcast holdings part of the basic tier. And in partnership with probably the largest single cable broadcast interest in Disney - who would get some sort of equity stake in the NFLN - they could force cable companies to pay more for all it's programming. Word broke about those negotiations about two weeks ago.

 

[jmt57]

For me and anyone else who didn't hear about the NFLN-ESPN agreement, what is it and how does it affect the situation?

There hasn't been any NFLN-ESPN agreement per se, just rumors of negotiations. The theory is that the NFLN would be shown on ESPN classic, which is available to almost all basic cable subscribers. This agreement to mediation appears to be a reaction by Comcast to these NFLN negotiations with ESPN. It would circumvent negotiations with Comcast by using ESPN to get the NFLN in to the homes of millions of viewers that currently don't get NFLN.




In a nutshell, here's the timeline to the best of my knowledge and (if I'm wrong, someone please correct me):

In 1994 the NFL signed a deal with DirecTV for the Sunday Ticket, the idea being to make the NFL available in rural areas. In 2002 the Sunday Ticket package was up for bid, but the cable companies wanted to be able to sell individual games as pay-per-view events; DirecTV won the bid again. The package came up for bid again in 2004, and again the cable companies insisted on being able to sell games like an "on demand" movie; the contract again went to DirecTV, which goes through the 2010 season.

In 2003 the NFL Network is launched.

In 2005 Comcast considered developing a sports network to rival ESPN, and worked through individul teams to offer on demand services.

In 2006 the NFL owners reject an offer from Comcast that would have given them an equity stake in Comcast in exchange for the rights to the 8 NFL games (that are now shown on NFLN) to be shown on the Comcast-owned Versus (then called the Outdoor Life Network.) Former commissioner Paul Tagliabue stated that when he delivered the news of the owner's vote, Comcast CEO responded by saying "your relationships with the cable industry are going to get very interesting."

NFL games are first broadcast on NFLN in the 2006 season.

Also in 2006, ESPN's Gregg Easterbrook starts writing columns questioning NFL games on NFLN, and later becomes the voice of one Arlen Specter regarding the legality of the NFL in regards to televising games that are not on public airwaves (i.e., "free".)

Later in 2006 the NFLN could not get themselves included in Time Warner's lineup, and suddenly found themselves bounced off Comcast's basic tier.

In October of 2006 the NFLN brought suit against Comcast, in regards to two million subsctibers that Comcast bought from other companies. Then in December Comcast sued the NFLN over violations in their contract, for urging fans that don't have access to NFLN to drop their cable company in favor of one who does carry the network.

In May of 2007 a New York state judge upheld Comcast's right to carry NFLN on a more expensive tier.

In February 2008 Dish Network moved NFLN to a more expensive tier due to the Pats - Giants game being made available on FOX and NBC, and a few days later the NFLN sued Dish for the move.

An appelate court reverses the earlier ruling permitting Comcast to move NFLN to a higher priced tier in late February.

In June, Comcast figures out a way to afford to put the Big Ten Network on their basic tier.

In July the Wall Street Journal reports that NFLN and ESPN are in negotiations. If it works out, it would get NFLN in to the homes of the vast majority of cable subscribers by placing it on a basic package rather than a more expensive tier.

In November of 2007 the FCC was going to invoke compulsory arbitration regarding the fight between NFLN and Comcast, but Arlen Specter stepped in and stopped it, saying that the "only possible outcome would be higher costs" and that the NFL didn't need the government's help.

In December of 2007 Comcast sued NFLN for breach of contract for urging fans to "make the switch" and pointing them to providers "that will bring you the NFL Network and not hold you hostage."

On the last game of the regular season, the NFL caves in to pressure and brodcasts the Pats - Giants game on two other networks in addition to NFLN.

 

[Full_Tilt_Full_Time]

As this issue gets resolved we have seen Sen. Arlen Specter's interest in spygate diminish. Does that have anything to do with the fact that Comcast is a huge contributor to his campaign(s)? Hmmmmmm.

 

[PatsWickedPissah]

As this issue gets resolved we have seen Sen. Arlen Specter's interest in spygate diminish. Does that have anything to do with the fact that Comcast is a huge contributor to his campaign(s)? Hmmmmmm.

Whoa! Who knew?

 

[Pujo]

Interesting that Comcast (and Time-Warner) have steadfastly refused offers of arbitration more than once with the NFL, but once the NFLN announces an agreeent with espn, Comcast is now suddenly willing to settle the dispute with a mediator.

Arbitration and mediation are very different steps. Agreeing to mediation is a lot less drastic. You might be right that the espn agreement prodded Comcast, but they certainly haven't done an about-face on the issue of arbitration.