Commentary

Major League Baseball's Velvet Hammer

In its cable channel campaign, Major League Baseball may have learned a lesson or two from the NFL's cable channel efforts of last year. 

MLB is putting a proposal together for cable operators, asking them to run out-of-market games under a package called, "Extra Innings," if they agree to a new baseball cable channel -- to be launched in 2009 -- that will run on their most valuable, analog tier of program networks.

If operators don't agree to that deal, then DirecTV, which just signed a new seven-year deal for "Extra Innings," will have the package exclusively. In the hard-fought race for consumers' eyeballs, this will give DirecTV an advantage over cable.

The NFL similarly tried just that sort of end around with the NFL Network and cable operators. But that was somewhat different, asking operators to pay a big increase in subscriber fees all year long for a mere eight live games.

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Cable operators wanted to run it on their pricey digital tier -- which goes to a narrower pool of their customers. The NFL said no way. The difference was that the NFL already had a deal with DirecTV for out-of-market games -- its "NFL Sunday Ticket" package -- so consumers already had this option.

Consumers needed to pay an extra fee to get that NFL DirecTV package. Not so with DirecTV's MLB package -- it is committing its widest number of consumers to the deal, some 15 million consumers (thought it has yet to be seen whether DirecTV might raise its overall rates).

The cable operators in this fight are actually flipping to the NFL argument --that consumers shouldn't be denied the sport, in this case baseball games.

The reality is that consumers are being denied baseball teams that are not in their home market. That's of far less value to most fans. By any estimation, out-of-market baseball games typically have lower ratings.

The key for any of this is advertising. Sports still are in high demand for advertisers, because it typically attracts male viewers that are difficult to reach.

The MLB, like the NFL, knows that any sports network means big money from advertisers. The NFL could have got wider distribution -- and thus improved advertising revenues -- if it wasn't so greedy in asking for triple the price for its monthly subscriber fees.

The MLB must be learning from the NFL's mistakes. Its principals must realize that a new MLB channel will be another lightning rod for cable operators. MLB isn't -- presently -- forcing more baseball down the throats of cable operators. Instead, it is just using DirecTV as not-too-quiet leverage.

Sure, it seems like a take-it-or-leave-it proposal -- especially to InDemand, the programming pay service of Comcast, Time Warner Cable and Cox Communications, which wants the "Extra Innings" package. But the fact is that this isn't the 1970s, when sports leagues would cry that you couldn't deny consumers their baseball, their football, their basketball teams.

These days consumers already have that, and have other ways to get more out-of-market games. It's the same with NFL.

For baseball, the deal is not an obvious hard ball -- it's a knee-buckling and somewhat cunning change-up.

 

 

 

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