Chiefs and Broncos on TV? Only for some

Originally Published: November 22, 2006
By John Helyar | ESPN.com

Want a third helping of turkey on Thursday? If your stomach can handle it, you got it. Want a third helping of NFL on Thursday? Not so likely.

The NFL Network's first broadcast of a regular-season game -- the Denver Broncos vs. the Kansas City Chiefs, at 8 p.m. ET -- will be available to only about 40 million of the nation's 95 million homes with cable TV or satellite dishes. The network is at loggerheads with major cable operators, who've balked at its demands for a big fee hike and a spot on basic cable.

Larry Johnson
AP Photo/Reed HoffmannYou might have to look hard to find Larry Johnson on TV on Thursday night.
At Comcast, the nation's biggest cable operator (24 million subscribers), the network is available only to customers who pay for premium digital service. No. 2 operator Time Warner Cable (13.5 million subscribers) doesn't carry the NFL Network at all. Among the other top-five cable systems, Charter Communications and Cablevision don't carry the network, either, and Cox Communications relegates it to a premium "sports and information" digital tier.

What gives? The NFL has long had its way in TV matters. Broadcast and cable networks repeatedly have agreed to whopping hikes in rights fees -- a 53 percent jump in the latest round of deals, reaping $3.7 billion a year for the league. But in this case, the NFL met stiff opposition after its three-year-old network announced plans to televise eight Thursday and Saturday night games this season.

The network told cable operators it would have to hike its per-subscriber fee from about 20 cents to 70 cents. The cable operators told the network to take a hike.

"That fee would put them in the top five of our network providers," says Mark Harrad, a spokesman for Time Warner Cable. "We feel that's way out of whack."

This sort of standoff isn't unusual in the cable television industry. Six years ago, for instance, Time Warner and Disney went through a long, public stare-down over rights fees before coming to terms. In most cases, cable operators eventually find a way to make a deal with providers of valuable content. Steve Bornstein, chief of the NFL Network and former president of ESPN, knows how this game is played and won.

But this is a particularly rugged skirmish. The NFL Network has sued Comcast over the cable company's plans to put the network on a premium-priced sports tier in systems acquired from Time Warner and Adelphia. The network also is embroiled in litigation with Charter Communications. The third-largest cable operator (5.9 million subscribers) signed on as the NFL Network's first big cable provider in January 2004, but the network hasn't been on Charter since December 2005 because of a basic-versus-premium dispute.

The NFL Network's insistence on a presence on basic cable goes to the heart of cable TV economics. ESPN, for example, is a cable network that all systems carry on basic. That means ESPN can collect a fee for every cable subscriber, not just those who choose to watch ESPN. The NFL Network wants that kind of a deal, rather than one that confines it to a premium tier with far fewer subscribers. By being on basic, the network also can command more for advertising, based on the larger number of viewers.

The NFL Network schedule

Nov. 23: Broncos vs. Chiefs
Nov. 30: Ravens vs. Bengals
Dec. 7: Browns vs. Steelers
Dec. 14: 49ers vs Seahawks
Dec. 16: Cowboys vs. Falcons
Dec. 21: Vikings vs. Packers
Dec. 23: Chiefs vs Raiders
Dec. 30: Giants vs. Redskins

There's some further history. The cable operators feel the NFL has favored their satellite TV rivals by awarding them the popular "Sunday Ticket" package. (If not for DIRECTV and Dish Network, which account for about two-thirds of the NFL Network's exposure, its subscriber base would be even skimpier.) Comcast reportedly bid on the package of eight games, only to have the NFL Network decide to keep them for itself. Moreover, the increased cost of sports programming was already pushing cable rates upward, making the NFL Network's grasp particularly unwelcome.

"The NFL is trying to force cable companies to charge many consumers for programming they don't want," says David Cohen, a Comcast executive vice president, in a statement. "Sports programming fees are out of control in general, and the NFL programming is very expensive."

Seth Palansky, a spokesman for the NFL Network, argues that these are not stiff fees and this is not niche fare, to be consigned to the systems' premium channels. To the contrary, he maintains the NFL is TV's most valuable programming and says the cable operators will come around when the games start airing and subscribers start complaining.

"It's 2006, and [for fans] not to be able to see a live NFL game should not be a reality," Palansky says. "The big guys like to feel some serious pain before they're reasonable."

The NFL Network has been trying to apply public pressure to the operators for some time. Its Web site includes an "I want NFL Network" page, telling fans how to express their wishes to their cable provider. So far, Time Warner's Harrad says he hasn't heard a "significant outcry from customers" about the network's absence from his company's systems. But he expects "we'll hear from more" once the games start on Thursday night.

John Mansell, a cable-TV analyst with Paul Kagan Associates, notes that the NFL Network's leverage is reduced by one significant factor: The Thursday and Saturday games still will be broadcast in the home markets of the teams involved. But he adds, "There will be pressure [on the cable operators] if there are really good games and high awareness."

Champ Bailey
Harry How/Getty ImagesThe Broncos' Champ Bailey is worth watching, but will you be able to see him?
The Denver-Kansas City game on Thursday night, for example, is a more compelling matchup than the two traditional Thanksgiving contests to be aired earlier in the day. The Broncos (7-3) and Chiefs (6-4) are AFC West Division rivals with winning records. Miami at Detroit (CBS, 12:30 p.m., ET) features a host team with a 2-8 record. Tampa Bay drags into Dallas for the 4:15 p.m. ET Fox game with a 3-7 mark.

Looking ahead, several other NFL Network games also have playoff implications. The Baltimore-Cincinnati game on Thursday, Nov. 30 matches the current Nos. 1 and 2 teams in the AFC North. The Thursday, Dec. 14 game also matches two teams -- San Francisco and Seattle -- currently running first and second in the NFC West.

The implications and interest level could greatly change in other late-season NFL Network games, too, depending on on-field developments. The Saturday, Dec. 16 game between Dallas (now 6-4) and Atlanta (now 5-5) could be meaningful or ho-hum, depending on the fortunes of those two teams between now and then.

Palansky claims the cable operators are coming around and want to make deals with the NFL Network now. But even if hostilities end between the network and the cable operators, nobody is predicting they'll be doing business in time for more fans to watch the inaugural portion of the network's eight-game run this season.

John Helyar is a senior writer for ESPN.com and ESPN The Magazine. He previously covered the business of sports for The Wall Street Journal and Fortune magazine and is the author of "Lords of the Realm: The Real History of Baseball."

John Helyar

Sports Business
John Helyar is a senior writer for ESPN.com and ESPN The Magazine. He previously covered the business of sports for The Wall Street Journal and Fortune magazine and is the author of "Lords of the Realm: The Real History of Baseball."