Chicago Sports fan's look out...


Supporting Founder
Original poster
Supporting Founder
Sep 8, 2003
Columbus, OH, USA
Your fine folks at ComCast are starting a sports network on cable in Chicago..

Taken from the article:

" Comcast SportsNet Chicago will carry a total of 248 regular season games, as well as pre- and post-season games. The agreement provides that each team will offer the network the same number of regular season games required under its previous cable television agreement, including:

* 72 Cubs games
* 95 White Sox games
* 42 Bulls games
* 39 Blackhawks games "
Comcast raises stakes for regional sports networks
Friday December 5, 2:32 pm ET
By Michael Learmonth

NEW YORK, Dec 5 (Reuters) - When cable operator Comcast Corp. (NasdaqNM:CMCSA - News) takes over regional sports programming in Chicago next fall, it won't mean much to die-hard fans of the Bulls, Blackhawks, Cubs or White Sox.

They will still watch their favorite teams on cable, and they'll see the same number of games, on a different channel.

But for Comcast, the nation's largest cable operator, the deal is an important step in its bid to control the escalating cost of sports programming and compete in a world where, increasingly, a few media companies own the rights to local sports as well as the means of distribution.

The leader in local sports, Rupert Murdoch's (News) News Corp. (Australia:NCP.AX - News), holds ownership interests in 19 regional sports networks, and is poised to take control soon of DirecTV, the nation's leading satellite broadcaster.

"Comcast will be selling sports programming to DirecTV, just like Fox will be selling programming in other parts of the country to Comcast," said Bernstein Research analyst Craig Moffett, who added that Comcast's own sports programming will boost its negotiating power

"As is always the case in media, this is all about leverage," he said.

By offering them an equity stake, Comcast lured the Chicago sports teams away from a network jointly owned for many years by Fox and Cablevision Systems. Comcast will manage the network and own 30 percent, while the owners of the four teams will divide the remaining 70 percent.

As part of the deal, Comcast was able to lock in carriage rates that rise closer to the rate of inflation than the double-digit increases typical of sports programming.

"This is a stable business model," Comcast CEO Brian Roberts said of the 15-year deal. "And the cost increases were reasonable."

The cost of sports programming has been rising annually at a 15 percent clip for the last five years compared to 5 percent for all other types of programming, according to Bernstein Research.

ESPN, the leading sports network and one of the highest-rated cable networks, has been asking for 20 percent rate increases for new carriage agreements.

Similarly, Cox Communications (NYSE:COX - News), which has been in a high-profile battle with Disney's (NYSE:DIS - News) ESPN over fee increases, renewed regional carriage agreements with Fox Cable Networks for six markets including Phoenix, Oklahoma City, New Orleans, Omaha and San Diego.

Financial terms were not disclosed, but Merrill Lynch analyst Jessica Reif Cohen estimated the yearly increases in the 9 to 10 percent range, far below the 20 percent ESPN has asked for.

Comcast owns 78 percent of Comcast SportsNet, a Philadelphia sports network, and a controlling stake in the basketball 76ers and hockey Flyers. It wholly owns Comcast SportsNet, a sports network in the Washington-Baltimore area, and 62 percent of Atlanta-based Cable Sports Southeast.

Like Comcast, Cox owns three regional sports networks, and AOL Time Warner owns one, Turner South.

But those holdings are dwarfed by News Corp., whose 19 regional sports networks include six it co-owns with Cablevision Systems (NYSE:CVC - News).

As cable operators seek to own more sports networks, then use them as leverage in carriage negotiations, independent operators worry that they'll be forced to take lower rates or be carried on higher-priced tiers with lower viewership.

"When the cable company owns the regional (sports network), they are very receptive to carrying it and carrying it on basic. When it's independent, there is hesitance and sometimes flat refusal," said Leo Hindery, chief executive of Yes Network, which carries the baseball New York Yankees, basketball New Jersey Nets and English soccer powerhouse Manchester United.

Yes Network is in a fierce dispute with both New York-area cable operators, Time Warner Cable and Cablevision. Cablevision has placed the Yes Network on a higher-priced sports tier, and Time Warner Cable wants to follow suit. Most cable company-owned regional sports networks are carried on basic cable.

"I don't begrudge Comcast for owning programming in that market," Hindery said, reflecting on the competitive implications of the Chicago deal for independents like his Yes Network. "But I take exception if they treat an independent network differently from one it owns." (additional reporting by Sue Zeidler)

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