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Report: NFL Network, ESPN deal in works
ESPN is in talks to form a partnership with the National Football League's NFL Network, the Wall Street Journal reported, citing people familiar with the situation.
Steven Bornstein, chief executive of the NFL Network and previously chairman of ESPN and president of Disney's ABC network, has been holding high-level discussions in recent weeks with executives of Disney, the owner of ESPN, according to several people familiar with the situation, the paper said. Some team owners have been briefed on the discussions, and Disney CEO Robert Iger and NFL Commissioner Roger Goodell have been involved.
A deal would bring to a face-saving end an embarrassing episode for the NFL and a bitter stand-off between the league and four of the nation's largest cable operators -- including Charter Communications, the dominant cable provider in the Madison area.
In the past two seasons, Charter's lack of a carriage deal with NFL Network stirred up a hornet's nest because a Green Bay Packers game was telecast by NFL Network each season. Fans who didn't have a satellite TV service or MHTC, which serves the ares of Mount Horeb, Dodgeville and Blue Mounds, couldn't watch the game at home.
Charter regional spokesman John Miller said in an e-mail that it's difficult for the company to comment specifically because it "has seen only media reports of rumored negotiations between ESPN and NFL Network, but such a partnership would be an interesting alternative to bringing the few games offered on NFL Network to our customers. We will await further developments and any information from the two parties."
An agreement with ESPN would represent a big shift in strategy for the NFL -- abandoning its effort to sidestep sports broadcasters like ESPN and take some of its valuable games directly to cable subscribers, who pay lucrative monthly fees. It would also send a message to sports organizations, which have enjoyed rising television fees for years, that even the biggest and most powerful sports league in the U.S. cannot launch a new channel without the consent of big cable operators such as Comcast and Time Warner.
The Wall Street Journal said one possible scenario could be a combination of the NFL Network with the ESPN Classic network, which has relatively low ratings but wide distribution on expanded basic tiers. ESPN would likely use its market weight and its eight additional games to seek higher subscription fees than the 16 or 17 cents it currently receives for ESPN Classic, boosting rates to something closer to what the NFL network has been seeking, Derek Baine, a senior analyst for SNL Kagan, told the paper. Under such a scenario, ESPN and the NFL could form a joint venture and share revenue, or ESPN could take an equity stake in the channel.
"We have a long-term and extensive relationship with the NFL and to that end we are always in discussions with them about mutual projects," Mike Soltys, vice-president of communications for ESPN, told the paper.
The NFL ran up against the cable operators in early 2006, when the league decided to withhold eight games from its lucrative TV licensing packages to put on the channel. In effect, the league was giving up hundreds of millions of dollars in potential licensing revenue to gain leverage with cable operators in securing distribution for its network. But it was trying to create a valuable cable asset with no middleman. The NFL also may have misplayed its hand, demanding about 70 cents per subscriber. Cable operators balked, refusing to carry the network on a basic level of service. Instead, they wanted to place it on a sports tier that cost extra.
Cablevision, Time Warner and Charter have refused to carry the NFL Network on the league's terms. Comcast, the country's largest cable operator, pulled the NFL Network from millions of homes after a bitter battle over the rights to the eight games, for which it had offered more than $400 million.
The NFL Network currently reaches about 40.3 million homes, according to Nielsen Media Research. It averaged 196,000 viewers during prime-time in 2007, according to Nielsen. ESPN Classic is on expanded basic and digital basic tiers in 62.7 million homes, according to ESPN.
File photo
NFL fans who don't get the NFL Network may be helped by a possible agreement between ESPN and the NFL Network.
