MLB, DirecTV Contemplate Exclusive TV Deal In a proposed deal believed to be worth $700 million over seven years, Major League Baseball may make DirecTV the exclusive carrier of its full-season television package, shutting out the cable companies.
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MLB, DirecTV Contemplate Exclusive TV Deal

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MLB, DirecTV Contemplate Exclusive TV Deal

MLB, DirecTV Contemplate Exclusive TV Deal

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From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.


And I'm Robert Siegel.

It could be a rough year for some baseball fans. We're talking about nitty-gritty-want-to-see-every-game fans who are willing to fork over the dollars for access to just about every game of every team all season long. Those fans may be forced to subscribe to a satellite TV service. Major League Baseball wants to cut cable systems out and make a deal with a satellite TV company.

Stefan Fatsis, sports writer for the Wall Street Journal, joins us now. He does most Fridays to talk about sports and the business of sports. Welcome back Stefan.

Mr. STEFAN FATSIS (Sportswriter, Wall Street Journal): Hi Robert.

SIEGEL: Now, baseball forsaking free over the air television in favor of pay-per-view, nothing new there, but dumping cable for satellite, that's big enough to provoke Senate hearings next week. What's going on?

Mr. FATSIS: Yeah. And you have the Senate Commerce Committee has scheduled a hearing on this deal. This all revolves around a package called Extra Innings. That provides up to about 60 out-of-town games a week for a $179 a year. It's been available on digital cable and on satellite television networks. It's not a huge business: about 600,000 customers last year, about 400,000 of them on two satellite TV networks, and 200,000 on cable. But this is a significant product for core fans of the sport.

And it's important to note that while ballpark attendance has never been bigger, the TV audience for national telecasts of baseball has been on the decline as this happen in other sports.

SIEGEL: So what Major League Baseball wants to do, I gather, is to negotiate with DirecTV, one of the satellite companies, and you'd have to subscribe to them in order to see this.

Mr. FATSIS: Right. And the other important piece of this agreement also is a new baseball channel that's expected to debut in 2009, and under the terms of a tentative deal that they've reached with DirecTV that new channel would be on their exclusively. DirecTV has about 16 million subscribers right now, a consortium of three cable companies that have carried the package in the past, reaches about twice as many homes.

SIEGEL: Well, why is Major League Baseball willing to limit or reduce the number of homes where its package might be available?

Mr. FATSIS: Well, they don't necessarily want to do it, but they got a great offer from DirecTV: seven years and $700 million. I talked to a senior baseball executive this morning. He said DirecTV has done a better job selling the Extra Innings package in the past. It's willing to do more original programming around the package and on this new channel, and it's willing to pay the sport more money.

And baseball also says that every fan that wants to can switch to satellite, or pay to watch the games online for about $79 a season, which obviously isn't the same as watching on a giant flat screen TV in your den. But Baseball says, look, the technology is going to change in the long run, and we want that business to grow too.

SIEGEL: But then, the cable companies said that this week, they in fact matched DirecTV's offer. Is-is the door totally shut to the cable companies, or are we simply talking about how much they're willing to pay?

Mr. FATSIS: Well, it haven't been shut. Baseball has said that they are willing to, essentially, give everyone a piece of this deal, but the starting point, Baseball says, has to be the negotiations and the deal that it has tentatively caught with DirecTV. So if it's a 100 million bucks a year, Baseball wants to find a way to get a 100 million bucks a year out of it. Then it evolves into this nasty story about contract negotiations.

Baseball said that the three cable operators involved here: Comcast, Cox, and Time Warner, didn't mention this week that they demanded clarifications to this package, on how they would pay for the extra games, how much - how much courage they would have to provide for this new channel. The cable companies responded they're being asked to put a higher price for all of this. DirecTV is getting a 20 percent ownerships stake in this new channel.

The cable companies aren't. Ultimately, this comes down to this new channel and to money. The baseball executive I talked to said, hey, we're willing to let everybody in, but everybody's got to pay.

SIEGEL: Well, thank you Stefan.

Mr. FATSIS: Thanks Robert.

SIEGEL: Stefan Fatsis, who talks with us Fridays about sports and the business of sports.

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