Big Ten, Comcast Reach Carriage Agreement

Jun 19, 2008  •  Post A Comment

After long, often acrimonious negotiations, Big Ten Network reached a long-term carriage agreement with Comcast that puts the channel on the expanded basic tier during the upcoming football and basketball seasons in the eight states where the conference’s 11 colleges are located.
A joint venture of the Big Ten Conference and Fox Cable Networks, Big Ten Network launched last August and has about 30 million subscribers before signing with Comcast. Signing Comcast was a key for the network because it has the most subscribers in Big 10 markets.
“This agreement allows us to reach many more Big Ten fans with our programming because of the high concentration of Comcast subscribers in Big Ten states,” Big Ten Network President Mark Silverman said. “With the Comcast deal now in place, the Big Ten Network will be available to more than two-thirds of all homes in Big Ten Country.”
The agreement is unusually complex.
Beginning Aug. 15, Big Ten Network will receive between 70 cents and 80 cents per subscriber (depending on whether you believe sources close to the network or sources close to the cable operator) in the conference’s eight-state footprint, where Comcast has about 5 million subscribers, none in Iowa.
Subscribers in the Philadelphia area of Pennsylvania, where Comcast is based, will be able to see Big Ten Network on the digital basic tier.
After the initial period, which ends with college basketball season, Comcast will be allowed to move the network from extended basic to a basic digital tier in markets where digital penetration exceeds an agreed-upon percentage.
Comcast subscribers in the footprint will also get access to games and other events in high definition, programming on video-on-demand, and other content on Comcast.net.
“We will be providing our customers with Big Ten programming through our signature video-on-demand service, and will have lots of highlights, replays, scores and more through Comcast.net so fans can keep pace with Big Ten action whenever they want to,” said Madison Bond, executive VP for content acquisition at Comcast Cable.
In the rest of the country, Comcast will be able to carry the network on any tier, but isn’t required to do so. To build up viewership and generate additional advertising revenue, Big Ten Network is offering the channel virtually free in those markets, so long as it is not placed on a digital sports tier. Local managers have to pay extra to put Big Ten Network on a sports tier.
Comcast had resisted putting the channel on a broadly distributed tier, arguing that if all of its subscribers had to pay, it amounted to a Big Ten tax. The network argued that other sports networks owned by Comcast, including Golf Channel, Versus and some regional sports networks, are already carried on basic. Both sides tried to get their messages out through unpleasant advertising campaigns running in Big Ten markets.
The dispute cost Comcast subscribers, who swtiched to satellite services to get the channel, according to analysts who follow the industry.
Comcast is having a similar dispute with the NFL Network, which it carries on a digital sports tier. The agreement with Big Ten Network will be used to show that independent network can negotiate deals with the cable giant without government intervention.
The deal was reportedly helped along by negotiations between Fox and Comcast when Fox was bidding against AT&T and EchoStar to get TV rights to Detroit Pistons basketball games for its FSN Detroit network.
Fox boxed out Comcast’s telco and satellite competitors and Comcast renewed its carriage agreement with the sports channel soon afterward.
Big Ten Network still has to reach carriage deals with some other big cable operators, led by Time Warner Cable. The Comcast deal is expected to make those negotiations smother because it eastablished a framework for an agreement, lays out areas where both sides can be flexible and a template for writing the unique and complex agreement into a contract.
[Editors: Gilbert, Baumann. Edited at 9:20 PST to add details throughout.]

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