Cable Operators Must Carry Big Ten Or Lose Subs

A Wall Street analyst suggests that barring a softening of their stance, cable operators could lose subscribers in Pennsylvania and the Midwest should they continue with no plans to offer the Big Ten Network when it launches Aug. 30.

Major cable operators collectively have some 9.3 million customers in states with colleges that play in the Big Ten, based on figures culled from a new report by Pali Research and the cable industry's trade group. And if many hunger for the network, they could flee to DirecTV, which is offering it to all customers on its basic tier, Pali's Richard Greenfield wrote.

Some 50% of Mediacom customers are in Big Ten states, with perhaps 20% of Comcast's, Time Warner's and Charter's, Greenfield estimated.

The operators are locked in a battle with the co-owners of the network, the Big Ten Conference and News Corp., over the terms of offering the channel. Balking at a reported $1 per subscriber asking fee, the operators want to make it available as part of a sports tier where customers would pay extra for it. The co-owners are looking for carriage on basic cable in Big Ten states. (News Corp. has used its ownership in DirecTV to engineer the satellite operator carrying it nationwide.)

The issue is percolating because the network will begin offering Big Ten football Sept. 1-39 games this fall. In the winter, it has a schedule of 140 men's basketball games.

Greenfield said the number of basketball games will increasingly give the network "leverage" vis-à-vis the cable operators who "would probably be smart to make deals sooner than later."

Lost subscribers could hurt share prices in cable companies.

"We are increasingly concerned about the impact the Big Ten Network carriage agreement process may have on the cable industry," Greenfield wrote.

Greenfield suggested that while some at the FCC are increasingly interested in allowing customers to pay for only the channels they want, cable operators that are fiercely opposed to what's known as a la carte pricing could be weakening their hand in the Big Ten dispute. By pushing for carriage of the Big Ten Network and others such as the NFL Network on a special pay-for-play tier, he said that "sounds like a la carte" and operators may have a tough time fighting it on the one hand and using a version on another.

"We believe it is a 'slippery slope' to keep asking/putting certain 'expensive programming' on tiers, while telling the government that mandated a la carte programming is bad for the cable industry," Greenfield wrote.

And, he said, cable operators seem willing to place sports networks they own on basic tiers, such as the new Comcast Sportsnet Northwest ion the Oregon area.

Cable operators argue that a la carte pricing would deprive customers of certain channels and drive up costs for customers.

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