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Fans caught when NFL, Big Ten networks lock horns with cable operators

11/21/2007

Welcome to Season 2 of the NFL Network, whose first two games should be wonderful showcases for the league's reigning champion (Colts at Falcons on Thursday night) and two of its most storied franchises (Packers at Cowboys next Thursday night).

Instead, they show something else: the damage done when a popular sports league locks horns with powerful cable operators.

That's particularly the case in Indiana and Wisconsin, where Colts and Packers fans are more exasperated than excited. Midwestern football junkies already have suffered through a season-long standoff between another popular sports league and these same powerful cable operators.

In large parts of Indiana and Wisconsin -- along with other heartland states -- football games carried exclusively on the new Big Ten Network have been widely unavailable. The Big Ten Network (BTN) insists it be carried on cable systems' digital basic service, ensuring wide distribution.

No way, say Comcast and Time Warner, the biggest cable operators in Indiana and Wisconsin, respectively. They'll agree only to put BTN on their premium sports tiers, which cost subscribers extra and have limited distribution. Therefore BTN has no carriage deals with them or the other major cable operators in those states.

BTN has made 168 deals with other cable systems, satellite TV firms and other video services, so it reaches 30 million homes since launching in August. But BTN has found out quickly what the NFL Network has learned since its inception in 2003. Even a league that's had its way on broadcast matters for years can't budge the big cable operators. The NFL Network currently has 35 million subscribers, well short of the 65 million target it set last year when it began its package of eight exclusive games.

The desire of the NFL Network and BTN not to be on a sports tier goes to the heart of cable TV economics. ESPN, for example, is a cable network that has carriage in more than 90 million multichannel homes. The NFL Network and BTN ultimately want broad distribution, rather than being confined to a premium tier with far fewer subscribers. (ESPN also has services that are not widely distributed, such as ESPNU and ESPN360.com.)

"I don't believe even putting the Super Bowl on the NFL Network would change anything," says Seth Palansky, a spokesman for NFL Network. "At this point, we'd rather take no deal than a bad deal."

The NFL has seemingly abandoned negotiation for federal regulation at this point. It's backing a proposal by FCC chairman Kevin Martin that purportedly would give independent programmers like the NFL Network a better shot at cracking the major cable TV systems.

Mark Silverman, president of BTN, is more optimistic he can bring big cable around because he believes he has the leverage of more games. The network will exclusively carry 140 men's basketball games during the 2007-2008 season alone.

"I think we'll get to 50 to 60 million [subscribers], maybe not until next year, but these deals will get done," he says.

For now, however, these are dreary times for Hoosiers fans who'd like to settle in front of the Colts-Falcons game while digesting their Thanksgiving turkey. Instead, many of them will be scrambling to find a place to watch it. They're used to it, after having had to scramble last Saturday to find somewhere to watch the "Old Oaken Bucket" clash between Purdue and Indiana, carried exclusively on BTN.

For Midwestern fans already suffering from BTN battle fatigue, the NFL Network represents more of the same. It's one more affront to people who love sports but who hate the sports business. They want to see smashmouth football, and instead they get rhetoric.

Each side excels at it. The Big Ten and NFL networks accuse the cable guys of denying fans' inalienable right to unlimited football. The cable operators accuse the networks of price gouging, in seeking 70 cents a subscriber (NFL) and 30 cents a subscriber (BTN).

One fan, venting on the message board of the Madison, Wis.-based Capital Times newspaper, assesses the BTN-cable standoff this way: "[They] are both waging campaigns against each other and asking the public to pick a side. That is like asking us to choose between Satan and Satan's evil twin. Both sides are greedy and manipulative."

For fans, the situation with the NFL Network isn't quite as bad as with BTN. The Colts-Falcons and Cowboys-Packers games will be aired by a local TV station in each team's home market -- the Packers have two of them, actually: Green Bay and Milwaukee. But the games can't be carried beyond the reach of that station's over-the-air signal. Out in the rest of Indiana and Wisconsin, a lot of fans are out of luck.

Taken individually, the networks' scarce availability stirs only the occasional mass outcry. You can count on hearing more than that in late December if the Patriots remain undefeated going into their last regular-season game. That game is Dec. 29 against the Giants and it's on the NFL Network, which 70 percent of American households don't get. (It will, however, be on Boston and New York stations.)

"There will be a big hullabaloo and it may create some leverage for the league," says Barry Frank, a veteran negotiator of TV sports deals with International Management Group. "But then the game will happen and it will be forgotten in 20 minutes."

But the convergence of the NFL and Big Ten battles in the Midwest might change the dynamics in that region. It creates a more critical mass of discontent. Instead of the usual passing tremors, there might actually be some seismic shifts -- in how people watch their TV sports and how cable operators are regulated by states.

Some effects are already evident. This fall has brought fan migrations, from living-room couches to bars and restaurants that have Big Ten Network feeds. The hot spots near the Wisconsin campus in Madison have gotten even hotter on game days now that many Badgers games are exclusively on BTN.

Fans are obviously taking Wisconsin coach Bret Bielema's mouthwatering advice, offered at a news conference the week before the Wisconsin-Ohio State game: "Go to a restaurant, sit around -- a lot of places are going to have [the game]. I'd grab maybe a burger and some cheese curds, maybe a refreshment, grab a friend, wear some red and support the Badgers."

Jim Luedtke, who owns a sports bar across the street from Wisconsin's Camp Randall Stadium, is enjoying the increased traffic and planning for even more fans for the Packers' game on NFL Network next week. He'll erect a heated tent outside his place -- called The Stadium -- to more than double his capacity to 800 people.

Luedtke sees 22 more big-volume dates ahead, when 22 Wisconsin basketball games are carried exclusively on BTN. But he knows taverns aren't a good permanent solution for most hoops-deprived Badgers fans.

"I have talked to at least 100 people in the last two weeks who are switching out of cable," Luedtke says.

The biggest beneficiaries: DirecTV and DISH Network, which both carry TBN and the NFL Network. Tom Prochnow, a Madison-area satellite-TV installer, reports his business is running more than double its usual level, largely because of cable's shutout of BTN.

"I talk to hundreds of people a year who are interested in satellite but never get around to it," says Prochnow, co-owner of Star Satellite. "This was the one that finally tripped the trigger."

As anyone who's lived on the wrong side of an apartment building knows, satellite isn't an option for everyone. The Capital Times message board has tales of woe from the countryside, where trees block the signals. The answer, suggests another writer: "Cut those trees down! Green Bay Packers football > Trees. Besides, chain saws are fun. Or just go to a bar like I do."

But enterprising fans have managed to find other cable alternatives, too, sometimes in surprising places. In a small town west of Madison, the Mount Horeb Telephone Company now provides video services. It carries the Big Ten Network and the NFL Network on basic, unlike the local Charter system, and it's accumulated a big backlog (by Mount Horeb standards) of orders. Doug Welshinger, who runs the Grumpy Troll Restaurant and Brewery in that town, has the video service and has been opening up his second-floor bar to hard-core Badgers fans for big games.

"We've got about 25 people up there, all in red and watching two big-screen TVs," he reported last Saturday, midway through the Wisconsin-Minnesota game. "I'm hoping they come for the game and come back for our microbrew."

A somewhat bigger telecom company, AT&T, also has used the standoff between the football powers and the cable powers to make hay. It's rolling out nationally a new video service, called U-verse, and it's touting a $59-a-month basic package that includes the Big Ten and NFL networks. Dan York, programming chief for AT&T, says that while he theoretically agrees the networks belong on a sports tier, they've provided a very useful flying wedge to establish U-verse in new markets. (The service is currently in two Wisconsin cities and four in Indiana.)

"This is a way to differentiate us and help sway consumers," York says.

AT&T has also played a canny game of political football. In the past year, the Big Ten states of Ohio, Illinois, Michigan and Iowa have passed legislation, pushed by Ma Bell, which makes it easier for new competitors to challenge the big cable companies. It's a great way for legislators to score points with football-deprived constituents with no use for cable cabals. The Wisconsin state Senate recently passed its version of a cable re-regulation bill and House approval is also expected. (Cable re-regulation laws also have passed in 14 other states.)

On top of that, bills have been tossed recently into a number of states' legislative hoppers which would require arbitration when networks like BTN and NFL are at loggerheads with cable operators. They've been introduced in Ohio and Wisconsin and another may be introduced in Indiana. But it won't get far in the last if the legislator whose committee handles such matters has anything to say. Rep. David Crooks knows Hoosiers are frustrated and will only get more so, when they find out how many Indiana basketball games are on the BTN.

But, he argues, the state has no business getting involved with what goes on TV. He'd rather see the two sides stew in their own juices and let the marketplace sort things out.

"This is all about greed," Crooks says. "Who's the greediest?"

John Helyar is a senior writer for ESPN.com and ESPN The Magazine. He is the author of "Lords of the Realm: The Real History of Baseball."