Comcast's Roberts Testifies in NFL Network Carriage Trial
Updated: Comcast chairman says network's carriage on sports tier about money, not retaliation
By John Eggerton -- Broadcasting & Cable, 4/17/2009 5:10:44 PM
Related: Comcast Claims NFL Network Was Overpriced, Legitimately Place on Sports Tier
Testifying on the final day of a week-long FCC hearing on the NFL Network's program-carriage complaint, Comcast Chairman Brian Roberts continued to argue that the move of the network to a sports tier was not about retaliation or favoring affiliated networks but about money--namely, $50 million a year and growing.
That is how much the cable operator saves in affiliate fees by carrying the net on the sports tier, where fewer subs means lower affiliate fees.
Robert said Friday that Comcast would be willing to move the channel off the sports tier if the NFL would agree to lower the channel's per-sub fees from the current 70 cents or so to the approximately 25 cents Golf Channel and Versus command. Those are the nets affililated with Comcast that the NFL said the operator was favoring.
The issue has some urgency, since Comcast's current contract to carry the NFL Network expires April 30. Comcast has also agreed to extend the current contract under the same terms, which it maintains is carriage on a sports tier.
Asked if the NFL would entertain either of those, an NFL spokesman only said: "The NFL wants NFL Network to be available widely at no extra cost to fans."
But the NFL would likely not see Comcast's D-2 offer as being comparable, since Versus and Golf are on a basic tier with 20 million homes, while only 1 to 2 million currently take the the sports tier.
Roberts agreed with NFL attorney Will Phillips that—after Comcast did not get what the executive labeled a legitimate shot at bidding on rights to the NFL Sunday Ticket package; after the NFL went to the FCC to compain about Time Warner's lack of carriage of the network; and after the NFL launched a $100 million marketing campaign against Time Warner and Cablevision—a state of war existed with the league.
Roberts said he had anticipated that the NFL would file a program carriage complaint when Comcast first started moving the network to the sports tier—Phillips had an e-mail from Roberts to that effect.
Roberts said that the company had considered what might happen from legal and public relations perspectives, but that the move ultimately was made because it yielded about $50 million or more in annual savings.
Phillips got Roberts to agree that if Versus—then OLN—had obtained the rights to a package of eight primetime games it would have probably tried to raise the price of its channel, as the NFL did of its network when it decided to keep the games there.
But Roberts also said that was a hypothetical, since there was never any consideration of simply adding those games. The Comcast boss said the bid for the games was part of a larger strategy to create a multisport network—NHL, Major League Baseball and football—to compete with ESPN.
Phillips pointed out that Comcast had at one point given NFL owners an option of making OLN into an all-football channel. Roberts said that had indeed been the case, but it would have involved other football as well, rather than simply the eight games.
As for the suggestion that Roberts had used tiering the network as a threat, then carried out that threat as retaliation, the Comcast chairman said he was instead making make sure the league owners were aware of the company's contractual right to move the network to a sports tier, suggesting he could not be sure that point had been conveyed by league negotiators.
He said he did talk to league officials about the difficulty of getting cable operator carriage for the NFL Network at the price increase it was seeking, but did so before he knew that Comcast was not going to get the eight-game package.
Roberts came back several times to the millions in affilate-fee savings from moving the network.
The judge will likely not rule for a month or so, and not before each side presents a proposal for resolution. Then it goes to the full commission. Whoever loses could take the decision to federal court.
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