NFL Gets Roughed Up on Hill

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Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) had some particularly tough questions for the NFL Tuesday, raising the spectre that the league might have violated antitrust laws in its move to seed its NFL Network cable network with regular season games.

If the NFL is raising prices and limiting distribution of the network without a countervailing business reason, doesn't that violate the Sherman antitrust act, Specter asked Landel Hobbs, Time Warner COO. Hobbs said he was not an attorney, but that the marketplace should settle the issue, not Washington.

Time Warner doesn't carry the NFL Network, arguing that it is too expensive and that it the NFL Network wants it carried on basic, while Time Warner wants it on a digital sports tier, where only those who want the channel will have to pay for it.

Hobbs said the channel at NFL's price would be one of TW's five most expensive, while its ratings aren't in the top 30.

The NFL decided not to sell an eight-game package to a network or outside cable operator--like Comcast from Specter's home state--but instead keep it in-house on its own NFL Network, which had previously been confined to replays, summaries, preseason games, and various sports shows. Then, it sought better carriage and more money given the added premium content.

Time Warner balked and doesn't carry the network. Comcast, which does carry the network, wants to move it to a sports tier. The NFL has sued to block that move, arguing it violates the contract.

In a committee hearing Tuesday on sports rights and the various carriage fights among cable, satellite and sports leagues, Specter also questioned why the NFL was not making its Sunday Ticket package, which has been a big draw for DirecTV, available to Comcast and other cable operators.

Jeffrey Pash, executive VP and general counsel of the NFL, said that to make it available to 80 million or so customers would undermine the basic economic structure of games delivered over broadcast TV.

DirecTV EVP Daniel Fawcett said that the Sunday Ticket exclusive contract raised no antitrust issues and was in keeping with Congress' intention in the 1992 Cable Act to promote competition from new entrants like satellite.

Hobbs said it was disingenuous for DirecTV to claim that it needs special protection through exclusivity and that it was "past time that DirecTV realize it cannot play the new entrant card."

The committee is planning to hold a hearing Dec. 8 on vertical integration--distributors also owning programming--that could touch on some of the same subjects


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