DirecTV Defends Its Play for Extra Innings

Mar 2, 2007  •  Post A Comment

By Jon Lafayette and Ira Teinowitz

DirecTV on Friday defended its plan to acquire exclusive rights to Major League Baseball’s Extra Innings out-of-market games package for $700 million over seven years.

The cable industry has stirred up opposition to the unannounced, still-being-negotiated deal. Sen. John Kerry, D-Mass., asked the FCC to look into the deal on behalf of Red Sox fans who might not be able to see games when they’re not in Boston.

In a letter Friday to Monica Shah Desai, chief of the FCC’s Media Bureau, DirecTV president-CEO Chase Carey said DirecTV will create a better deal for consumers by investing to make Extra Innings a better product than it was while on cable; he said no governmental action is called for.

Mr. Carey also asserted that no one will be denied access to the great American pastime. Consumers who can switch to DirecTV from cable will be provided free equipment and installation, and the 5,000 people in the country who have the package and cannot receive DirecTV will have access to the games through MLB.com.

Mr. Carey added that policies set by Congress and the FCC allow for some programming to be provided on an exclusive basis.

Sen. Kerry said that while he was glad DirecTV responded promptly to the FCC, “I remain unconvinced that taking a choice away from consumers is good for baseball.”

He added that he hoped DirecTV and MLB do not announce a deal until after the FCC and Congress have looked into the matter.

In his letter, Mr. Carey described what the Extra Innings service would look like if the satellite TV provider completes its deal with MLB. Most games will be provided in high-definition on satellite-something cable operators don’t have the bandwidth for now-and the games will be accompanied by the Strike Zone channel, which will deliver live cut-ins of games throughout the country as well as scores and statistics.

“DirecTV will do for Extra Innings what we have done for other programming: transform a service that had enjoyed limited popularity when offered by multiple [distributors] into a fan’s dream,” Mr. Carey said.

DirecTV also is agreeing to carry MLB’s Baseball Channel, which will be available to other distributors as well.

According to Mr. Carey, only 230,000 non-DirecTV subscribers purchased Extra Innings last year. (About 270,000 DirecTV customers bought the package.)

“The only real barriers to cable customers who want to switch to DirecTV are imposed by cable,” Mr. Carey added. “Cable penalizes such customers by increasing the price of Internet service if a customer drops cable’s video service. Furthermore, if cable did not prohibit a direct connection between the Internet and the set-top box, MLB.com could easily be viewed on television sets.”

In his letter, Mr. Carey said that more than 400 games are televised in most broadcast markets by local stations, regional sports networks, Fox, TBS and ESPN.

“In the end, this transaction will not reduce the access of any baseball fan to his or her home team games or to the many out-of-town games MLB makes available each year outside of Extra Innings,” he said.

Last week Echostar blasted exclusive sports deals as anti-competitive and anti-consumer.

“There is a line that must be drawn between a healthy, competitive market and one that deprives most Americans of the sports they love. In our opinion, that line has been crossed,” EchoStar said in a statement.

EchoStar called the potential Extra Innings deal “particularly egregious” because “we will be forced to take away valuable programming from existing subscribers who depend on EchoStar to receive all their television channels.”

(Editor: Horowitz)