Petulant Football Networks vs. Cable Monopolists

Categories: ',TV Business

Written By

October 6th, 2007


The NFL Network and the new Big Ten Network are wrangling with cable MSOs [NYTimes, reg. required] over the terms of carriage of their networks.

The football networks want carriage on the basic channel tiers, plus a relatively high fee [opinions differ] per subscriber. The cable MSOs want to put the networks in a special "sports tier" that would cost extra for subscribers and drastically limit the reach of the networks.

I've always thought cable MSOs had nice tidy monopoly businesses, but in this case, I think it hurts them.

In a competitive situation, if a supplier brings you a product or service and names a price you don't want to pay, it's a "No, thanks" situation and on you go.

If you're a monopoly, and the same thing happens, the suppliers scream "Anti-trust!".

Now, in this particular case, I think the cable MSOs are acting in their best interest, giving wide distribution to their own sports channels, wanting to buy other sports content at the lowest price possible, but not grant wide distribution to others except on very favorable terms. But if I were a shareholder of a cable MSO, that's what I would expect! [I am not].

The football networks, facing the monopoly wall, figure it's in their best interest is to head to court. Perhaps it is.

One possible outcome of this [and other efforts] is the government stepping in and mandating ala carte cable channel offers/pricing.

In that case, it's clear who the winners and losers will be:

Winners: Most consumers, a few very high value "basic" cable channels [ESPN and a few more on this list]

Losers: A few consumers who want "everything", and the vast majority of cable channels.

Unknown: Cable MSOs. I think if they play their cards right, they could come out fine. If they bungle the politics of such a change, they could get hosed.

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