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Questions of Exclusivity Surround DirecTV Deal Print
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Written by Maury Brown   
Friday, 23 February 2007 13:31

Extra InningsAfter traveling to Indianapolis for the Sports Management Worldwide Conference today, The Biz of Baseball is back on track with the following news...

The news of a pending announcement of MLB coming to an agreement with DirecTV to show Extra Innings exclusively was supposed to be announced today. Then word arrived late yesterday that the FCC has shown a keen interest in whether customers will have access to the MLB package for out-of-market games.

Friday, Richard Sandomir of the NY Times shed some more light on the deal, and why it had yet to be announced. As touched on yesterday, there is word that MLB may be willing to relax the window of exclusivity on DirecTV, from 7 years to 3 years, to coincide with the launch of MLB's proposed 24-hour baseball-only channel. That may not be the case, or at least at the time of inking the deal. As reported on the NY Times:

Letting the exclusivity lapse after the 2009 season might have eased a bit of the outrage. And, potentially, it might have softened the guaranteed fulminations on Capitol Hill when baseball and DirecTV officials testify sometime soon before the Senate Commerce Committee.

But according to executives familiar with the agreement who were not authorized to speak about it, the exclusivity will not be relaxed, at least not when the deal is announced. If it is eventually eased, DirecTV would surely reduce its payments; a savvy strategy if it believes it has converted a significant number of new customers and reached a ceiling of Extra Innings buyers.

As to how cable and InDemand, the service that provides Extra Innings on cable, and EchoStar, DishNetwork's parent company are reacting, Sandomir further reports:

EchoStar, Dish’s parent, issued a tart statement Wednesday that railed against exclusive sports deals and called the proposed DirecTV-M.L.B. agreement a “dangerous step backward to an anti-competitive world.”

Three EchoStar publicists declined comment on whether Dish sought its own exclusive deal. A DirecTV spokesman said: “We view this as sour grapes coming from EchoStar and ironic considering that it too had opportunities and negotiations to secure the optimal deal for its own business interests.”

As mentioned within the article, the deal must be approved by the owners before fully implementing the deal. Many markets will be in a lurch due to agreements with cable operators such as Time Warner and Comcast. The Mets, White Sox, Padres and Phillies are cited as examples as clubs that would be impacted by the agreement.

As noted, MLB should have been able to ink this deal some time ago. Whether the FCC's sudden interest is part of the equation, or ownership discontent has any bearing on why the deal was not announced today, none of the principles in the deal would speak on record.

 

 
 
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