Satellite firms not yet suited up for Kings games

#1
http://www.sacbee.com/content/sports/basketball/kings/story/11295458p-12210615c.html
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[font=verdana,geneva,arial,helvetica,sans-serif]Satellite firms not yet suited up for Kings games



By Clint Swett -- Bee Staff Writers
Published 2:15 am PST Tuesday, November 2, 2004

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Watching the Kings on TV still isn't a slam dunk.

Even as Starstream Communications on Monday became the second small cable carrier to purchase Kings programming from Comcast, the major satellite players - Dish Network and DirecTV - remained on the sidelines on the eve of the team's season opener.

Starstream, which serves more than 13,000 customers in South Placer County, announced it has purchased the rights to carry Comcast SportsNet West, a 24-hour regional sports channel that launches today with the Kings as its centerpiece.

The nascent network will broadcast 52 Kings games this season, including tonight's tipoff in Dallas. The balance of the 82-game schedule will be carried by a combination of national cable channels (ESPN, TNT) and the Kings' local over-the-air affiliate, Channel 10 (KXTV).

"We've had many requests to add this network to our channel lineup and hope it will make our customers and Kings fans happy," Zoé Hazen, president and chief executive of Starstream, said in a statement. Terms of the deal were not disclosed.

SureWest Broadband previously announced it would carry Comcast SportsNet West.

A deal with a third cable company - Charter Communications - is expected to be announced today.

But that may be the only additional agreement finalized before the season begins: According to two sources familiar with the negotiations, neither Dish Network nor DirecTV is expected to strike a deal today with Comcast.

That means the estimated 350,000 satellite subscribers in the Sacramento-Stockton-Modesto TV market are unlikely to get the opener - with DirecTV fans possibly facing even more missed games, as talks between that company and Comcast are said to have hit a snag.

Bob Marscocci, a spokesman for DirecTV, said Monday that the satellite company "continues to negotiate with Comcast." He declined to say when - or if - DirecTV might reach an agreement with Comcast.

Asked about talks with DirecTV, Comcast SportsNet spokeswoman Susan Gonzales said "some providers are moving more quickly than others."

Over the weekend, Dish Network's customer service department began sending e-mails to subscribers who had inquired about Kings programming; in one message, the company said it's "hopeful" that it can begin offering Comcast SportsNet West "within the coming week."

In an interview Monday, Dish spokesman Steve Caulk said the two sides "are still negotiating, and we're hopeful of getting something done."

Neither Dish Network nor DirecTV discloses regional subscription figures, but DirecTV is larger nationally, with about 13 million customers to Dish's 10.1 million. (Locally, Comcast is the dominant pay-TV provider, with more than 770,000 subscribers from Chico to Fresno.)

Citing confidentiality agreements, all parties central to the SportsNet West negotiations have been mum about Comcast's asking price.

Indications are that it's steep.

An online newsletter published by the Rancho Murieta Association said Comcast had offered SportsNet West to that gated community's cable system for $42,000 in the first year of a 10-year deal - $1.60 per month for each of the 2,200 homes there.

The figure, according to the newsletter, would increase by 5 percent in each subsequent year. The association declined to buy the programming - the only pay-TV operator to do so.

A source with knowledge of Comcast's negotiations with SureWest verified the monthly $1.60 per subscriber figure.

Industry experts consider it a high price to pay for a network whose only significant draw is the Kings, with other offerings - from the Monarchs and college athletics to fishing and billiards - considerably less compelling.

Fox Sports Net typically charges about $2 per subscriber per month, said John Higgins, deputy editor at Broadcasting & Cable magazine. But in the San Francisco Bay Area, Higgins noted, that includes the San Francisco Giants, Oakland A's, Golden State Warriors, San Jose Sharks and Pacific-10 college sports.

"(SportsNet West is) essentially a one-sport network, so $1.60 is a pretty full price," Higgins said.

Comcast's Gonzales defended the asking price, saying: "We've offered a fair market price to all providers, which is evident by the two providers who have already signed agreements."

Industry analyst Jimmy Schaeffler said that while the price is high, carriers must weigh that against the cost of losing customers. "If they do an analysis and it points to more customer retention ... they will bite the bullet," said Schaeffler, a senior analyst with the Carmel Group.

Suzy Woolf, a computer programmer and Charter subscriber from Dixon, said she'd be willing to abandon her cable company if a satellite operator such as Dish Network bought the Comcast programming and Charter didn't.

"I'll be really disappointed if I have to miss a lot of games," she said. "I've been a Kings fan forever. I even have their games written on my calendar."

But DirecTV subscriber Craig Tanikawa said he's not likely to defect, no matter the outcome of negotiations.

"The season is only from November to April," he said. "Ninety-nine percent of the time I'm not watching basketball."


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VF21

Super Moderator Emeritus
SME
#3
Industry experts consider it a high price to pay for a network whose only significant draw is the Kings, with other offerings - from the Monarchs and college athletics to fishing and billiards - considerably less compelling.
Industry experts who aren't employed by Comcast. ;)

Comcast's Gonzales defended the asking price, saying: "We've offered a fair market price to all providers, which is evident by the two providers who have already signed agreements."
OR could it be that those two cable companies were willing to pay the price rather than lose customers to Comcast?

I've said it before - I do not begrudge Comcast the opportunity to make as much profit as they possibly can from their business. But it just irritates the crap out of me when they try to sound as though they're just really nice guys and can't understand why anyone would think otherwise. IF the Maloofs hadn't insisted on the contract provision ensuring that Comcast had to OFFER the channel to other providers, do you think we'd even be having this discussion???

;)
 
#4
OR could it be that those two cable companies were willing to pay the price rather than lose customers to Comcast?
Correct me if I'm wrong, but don't Charter and, what was the other? Starstream? service areas ComCast DOESN'T? Hence the reason the people who had other cable companies outside of ComCast's service area were so upset?

SureWest has some over-lap, which is why they jumped on the deal weeks ago.

Remember- Pay TV= ALL blood-sucking leaches
 

VF21

Super Moderator Emeritus
SME
#5
I believe there's some overlap, but I'm not sure how much..

The point I was making was that, IMHO, Gonzales was making it sound as though Comcast was offering a wonderful deal and that the satellite providers were just being big meanies.

$1.60 per subscriber for a single-draw sports network is ludicrous from a consumer viewpoint but pretty good from a business approach. The 5% arbitrary annual increase is a touch of genius. Comcast is playing hard ball. Again, good decisions business-wise, but certainly not the best deal for game-starved fans.

And yes ... Pay TV = ALL blood-sucking leaches
 
#7
Kingsgurl said:
Correct me if I'm wrong, but don't Charter and, what was the other? Starstream? service areas ComCast DOESN'T? Hence the reason the people who had other cable companies outside of ComCast's service area were so upset?

SureWest has some over-lap, which is why they jumped on the deal weeks ago.

Remember- Pay TV= ALL blood-sucking leaches
That's true. I have Starstream and have had them since I moved to Rocklin 10 years ago. They are the only option up there. I had been e-mailing back and forth with one of the VP's and because of my conversations I was pretty much resigned to the fact that they wouldn't pick it up. However, Surewest is now moving into their territory in Lincoln and I think this forced them to pick up the channel to stay competitive(I will tell everyone that it was my constant badgering of my cable provider that got us the channel though!!!)
 
#8
A little bit about what is likely going on and some clarity about a couple things in the press (from SactoGreg on the Bleacher Mob Forum)...

1. Is it true that Comcast MUST charge the same thing to all under FCC rules?

Not true. The reality is, they could charge whatever they want, and depending on the deal, could give concessions based on the commitment from other party (usually in the form of # of customers).

IMO, Comcast is keeping the burden of any media backlash off their backs by claiming the offer is the same for all parties they are negotiating with. Not a bad move. Truth is, it's hard to compare costs as all of the companies are working under non-disclosure agreements.

2. What is your opinion of how that price was established? Was it merely a free market decision left up to Comcast, or are there any FCC rules that could have impacted the final number?

IMO, it's hard to determine the basis of their pricing structure. Comcast has done this in other markets so they carry quite a bit of experience in what the industry will pay.

Typically (in the cable space), programming fees, license and maintenance fees and other similar expenses are calculated against the number of customers the affiliate/operator has. In fact, my experience with pricing models for the sake of comparing similar products was reflected as a "cost per subscriber".

3. Could the Maloofs have been involved in the initial price setting as part of the negotiations (to make sure it was reasonably offered so that most Kings fans could get access)?

It's possible. But knowing Comcast, they set the price themselves. It's a valid question, because the Maloofs may indeed have required this to be an amendment to their agreement with Comcast.

4. A little birdie also told me that Comcast was given exclusivity for the first year of their deal with the Kings, so did they really have to offer the channel to others?

They did receive exclusivity for 12 months. What that means I'm really not sure, other than the fact that Comcast controls which operators can carry their network and at what cost.

Usually an exclusive arrangement like this one prevents another operator from cutting a deal with the Maloofs directly.

What's really funny about this whole situation is that deals like these usually are constructed to hit competitors between the eyes, with respect to customer erosion.

And as we are seeing first-hand, the other cable operators in the area really aren't Comcast's competitors. It's the dish operators, so landing a deal with Comcast is much more difficult for the satellite companies.