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Wednesday, March 21, 2007

NY Times' Richard Sandomir dishes MLB Extra Innings Cable deal--3/22/07

"The rejection sets up two showdowns: one on Tuesday, when M.L.B. and DirecTV officials are to testify before the Senate Commerce Committee about their seven-year, $700 million agreement; and another March 31, the deadline for cable and the Dish Network to meet baseball’s terms."
    • So, Tues. the 27th and Sat. the 31st are deadlines.
"In rejecting InDemand’s offer in less than an hour, Bob DuPuy, M.L.B.’s president, said in a statement that it “falls short in nearly all of the material conditions” laid out in baseball’s deal with DirecTV.
  • Tim Brosnan, baseball’s executive vice president for business, said in a telephone interview that “the correspondence they sent us amounts to a misleading press release and a failed strategy if their intention is to make a deal and to truly deliver this package to their customers.”

"Robert D. Jacobson, the president of InDemand," (InDemand — the cable consortium owned by Comcast, Time Warner and Cox) "said by telephone that he was surprised by baseball’s quick rejection of his proposal because “we understood that if we matched the terms of the DirecTV offer, we’d have a deal. We feel we’ve done that.” He added, however, that he was never shown the contract between baseball and DirecTV.""

  • In other words, MLB, Inc. won't discuss or make a counter offer. The bucks they're getting from DirecTV have already gone out the door in their minds.
(The only point that jumps out to me is the 80% figure promised from each service to the Baseball Channel. InDemand knows that 80% of its base would be a much larger number than 80% of DirecTV's. So they're offering a number equal to DirecTV's 80%, which is of course fair and equal to what DirecTV is offering, which is what's pissing off MLB, Inc. But the offer is not duplicitous or misleading at least in that key area, which they're claiming. One other point involves ownership of the Baseball Channel):

"In its offer to baseball yesterday, InDemand said it would match DirecTV’s total subscribers for the channel in 2009, however much it increases from 15 million.

  • The parties were also split on how to count Extra Innings subscribers and, thus, how to calculate what baseball would be paid for those digital cable customers.

Later in the day, Jacobson issued a statement that said, “By rejecting this matching offer, M.L.B. has proven it never intended for InDemand to have a fair and equal opportunity to bid for Extra Innings.”

  • Baseball and DirecTV officials were headed to an exclusive deal on Extra Innings when fans who watched out-of-market games on cable voiced their outrage in e-mail messages, chat rooms and petitions. The fans’ anger prompted baseball to give InDemand and Dish 23 days to make a deal. (Dish is still in talks with M.L.B.)
  • But one thing they would not get is a stake in the channel; DirecTV owns 20 percent of it."
I'm not sure what the ownership conversations involve. I just don't get it from this. Article does say MLB, Inc. is still talking to DISH Network.

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