MLB has deal to keep 'Extra Innings' on cable TV
NEW YORK -- After negotiations that went into extra innings, baseball struck a deal to keep its "Extra Innings" package of out-of-market games on cable television.
Under pressure from Sen. John Kerry, baseball and iN Demand reached an agreement in principle Wednesday on a seven-year contract, a deal that likely will allow the sport's new TV network to be available in at least 40 million homes when it launches in 2009.
Baseball announced an exclusive $700 million, seven-year agreement with DirecTV on March 8, but viewers who would have lost TV access to the games complained.
"The concern expressed by our fans who would have been forced to switch to alternative carriers or were unable to switch was something we tried to be responsive to," baseball chief operating officer Bob DuPuy said.
Kerry had asked the Federal Communications Commission to investigate the original deal, and during a hearing last week in Washington he pushed baseball to resume talks with iN Demand, owned by affiliates of Time Warner, Comcast and Cox. While baseball had set a March 31 deadline, the sides kept negotiating and announced a deal Wednesday night, an agreement that still must be finalized.
"All we ever wanted was a victory for the fans, and this outcome is a big step forward," Kerry said in a statement. "Everyone kept talking and pressing until we had a deal that protects the rights of most fans to follow their hometown team."
IN Demand began making games available to cable systems in progress starting at 8 p.m. ET Wednesday, president Robert Jacobson said. The package will be available for $159 this year through a free preview period that will extend into next week, he said, but the 2007 price for those subscribing after that has not been set.
"I'm exhausted but happy," Jacobson said. "We always needed to feel like we were treated fairly relative to the other distributor. We felt like got our fair share."
As part of the agreement, iN Demand and DirecTV each will receive about 16 percent equity in the new network, a person familiar with the deal said, speaking on condition of anonymity because that detail wasn't announced. Under the original agreement, DirecTV was to be a 20 percent owner.
IN Demand will make the "Extra Innings" package available to other cable companies, which also would be required to carry the MLB channel. Baseball is willing to resume negotiate with Echostar's Dish Network, baseball spokesman Rich Levin said, but DirecTV president Chase Carey said he anticipated for now that his company would be an exclusive satellite carrier.
The dispute was largely over baseball's desire to have a deal that will allow its network to be widely available on a basic cable tier. At 40 million homes, it would be one of the largest launches in cable history.
"It provides both the financial stability and the exposure to ensure a successful launch of the channel and bring the game to as many fans as possible," DuPuy said.
Because of the new deal, DirecTV will pay less than it would have under the original agreement.
"The economics are better for us on the 'Extra Innings' side," Carey said. "Clearly there were benefits you had in capturing subs [subscribers]. We were paying a lot of money to get it. At what price? We weighed all the positives of each."
Copyright 2007 by The Associated Press