22 April 2005

Comcast to O's & Nats: "Not so fast my friend"

You probably know by now some details about MLB's payoff to Baltimore Orioles owner Peter Angelos over the Expos' move to DC. MLB allowed the O's to set up a new regional sports network (RSN) called Mid-Atlantic Sports Network. MASN is to be run by the O's, with Angelos having complete control over broadcasts of most O's and Nats home games. MLB has a stake in the venture that will grow annually, but the stake is capped at 33%. The Nats get a "market share" price for the rights to broadcast such games; estimates had the amount at $25 million.

That all sounds well and good for baseball (unless you're a Nats owner who wants a little more control over the situation), but it appears that baseball forgot to consult with a company that's normally a big player in such deals: Comcast. Comcast is the dominant cable operator in much of the country, and it considers the mid-Atlantic area its backyard (it's headquartered in Philadelphia). Comcast also runs regional sports networks throughout this area, and its position as both network (Comcast Sports Net) and distributor (Comcast Cable) gives it some unique power.

What happens when you don't consult Comcast on these things? It's America, so Comcast sued MLB, the O's, and MASN. In the meantime, Comcast is refusing to show Nats games that would normally appear on cable (those home games again). This hardball tactic has worked before when negotiating per-user fees for carrying the RSN, or even carrying it in the first place. The cable provider holds most of the cards in these battles, and they can wage the PR battle that normally hits the teams harder than the cable provider.

Comcast isn't happy about not being able to bid on the rights to carry the Nats. Since MASN is an O's venture, the O's would leave CSN once their contract was up in 2006, leaving CSN in the lurch. If it sounds familiar, you don't need to go far to find similar examples.

Comcast can go a number of ways with this. They could win the suit and have open bidding for the Nats. They could ask for a piece of MASN. They could also choose not to carry MASN at all, or carry it only on expanded basic cable instead of cheaper basic cable. This may also be simply a ploy to get a favorable deal to carry the RSN. But based on their recent expansion, I'm led to believe that they legitimately wanted a chance to broadcast the Nats. This may end up in the courts for quite a while since there's no obvious middle ground. The losers will be the fans, and the eventual Nats owner as well since broadcast rights fees factor into the Nats' final purchase price.

That's a long-winded rant just to get to how this affects the A's. It comes down to one suggestion for Lewis Wolff: Play nice with Comcast. CSN opened up shop in California last fall when they got the nod to carry Sacramento Kings games. They've positioned themselves as the Central Valley's RSN, and they're poised for a bigger advance throughout California. They are on digital cable throughout the Bay Area (channel 401 if you're interested). They don't have any of the Bay Area's major pro teams yet, but you can be sure that as each team's contracts expire, Comcast will swoop in for the kill. They have the built-in advantage over Fox Sports Net because of that distributor position. It could turn out good for viewers as it may cause a sort of bidding war, and FSN, which has a difficult time carrying 4 teams (Giants, A's, Warriors, Sharks), may step away a bit, allowing for better coverage for all teams. That is, unless you like hunting for FSN+.

Comcast will be the ultimate roadblock for the A's if Wolff were interested in setting up his own RSN. Comcast could use the same tactics they used with YES/Yankees, or even drive an RSN out of business, as they did in Minnesota.