Comcast Eyes Higher Affiliate Fees After OLN Acquires NHL Rights

Aug 18, 2005  •  Post A Comment

Comcast expects its subscribers and other cable operators to help it pay for its new investment in hockey programming.

Comcast secured the rights to broadcast hockey on its OLN channel after ESPN declined Wednesday night to match Comcast’s offer.

In a conference call Thursday morning Comcast Chief Operating Officer Steve Burke said that a number of OLN’s affiliate deals are expiring at the end of the year. “It’s fair to assume [with the NHL added to the network’s programming] your affiliate fees will go up,” he said, also adding that he expects to expand the number of homes in which OLN is available.

The Comcast package calls for the league to receive $135 million over two seasons for rights to televise games on OLN. OLN and Comcast have an option for a third year at $72.5 million. The league will get another $15 million if OLN’s distribution exceeds 80 million subscribers. OLN has 64 million subscribers, compared with ESNP2’s 89 million.

Comcast also guaranteed distribution of an NHL network, which will be carried on a digital sports tier. Comcast will pay the league $15 million if certain subscriber levels are not reached. The NHL network’s programming will include live game broadcasts.

OLN plans to televise hockey games on Mondays and Tuesdays. The league will aim to make Monday’s game exclusive, with no games other than the one televised by OLN on the schedule that evening.

Comcast also obtained rights to use NHL programming via broadband, online and on VOD. Some game broadcasts will be streamed, the league said.

ESPN decided in May not to exercise an option to pay $60 million for NHL rights. “We worked very hard to build and sustain our relationship with the league and would have liked to continue. However, given the prolonged work stoppage and the league’s TV ratings history, no financial model even remotely supports the contract terms offered,” said George Bodenheimer, president of ESPN and ABC Sports.

Comcast executives downplayed speculation that they plan to build OLN into a sports network competitor to ESPN. Next on Comcast’s sports wish list might be a package of late-season NFL games that may come on the market later this year.