NFL & Comcast…reach a deal? What?

Posted on May 20th, 2009. Written by Emmett Jones.

“When hell freezes over.”

“When pigs fly.”

“Only if you were the last man on earth.”

“When the NFL and Comcast reach a TV deal”

Apparently the NFL and Comcast are capitalists and in the business of making money (Who knew?!?).  After a prolonged 3-year battle between the two sides, it appears as if the unthinkable has happened; they’ve agreed on a deal to move the NFL network onto Comcasts digital basic tier.

NFL Network and Comcast have finalized a carriage deal that will add 10 million homes to NFL Net’s distribution. The deal will put the network on Comcast’s digital basic tier, the same tier that houses MLB Network. The NFL had been seeking a license fee of about $0.70 per subscriber per month, but eventually settled on a rate of $0.40-0.45 per sub. (Where previously, the NFL was in a market by itself, this new rate is now comparable to other networks like CNN and Fox News — Ed.) The agreement does not involve giving Comcast any equity in the network. The move from the sports tier to digital basic will be completed by August. The deal also includes VOD for Comcast digital customers and the ability of offer the RedZone Channel when it is created. As part of the agreement, the two sides will drop its pending legal actions in a New York state court and at the FCC.

First of all, let me give a hat tip to Sports Business Journal writer John Ourand.  I first found out about this story from him via Twitter (@Ourand_SBJ) and when I questioned him about the licensing fee, his guess was right on,

Ourand_SBJ I don’t know the exact number. But I would bet that it’s below 50 cents. 3:59 PM May 17th

The fact that the NFL has agreed to a reasonable per subscriber license fee is really what makes this deal work.  As I mentioned before, the network ended up on the premium cable tier because cable companies didn’t want to incur the high licensing costs, and they didn’t want to spread that cost across the board to all consumers, knowing that all consumers did not want the NFL network.  So instead, Comcast bundled the network with some other sports oriented channels that a very large portion of its subscribers did not want to watch, and overcharged for the whole package.  Its enough to make you hate your cable company right?  But fortunately, all of that is now in the past.

The big winners in this situation?  the fans.  As mentioned in the SBJ article, the move to digital basic will bring in roughly 10 million more subscribers starting in August.  And now that the largest obstacle (Comcast) has fallen, the NFL and many others expect to finalize deals with other companies with whom they previously were at an impasse (i.e. Time Warner).  The end result?  more people get to view the NFL network without any price increase to the viewers themselves.

Sounds like a good deal right?  Each side making more money and the fans getting what they want as well.

UPDATE: you know what is funny? the fact that the NFL’s old website, iwantnflnetwork.com has been taken down.  Look, they really do love each other!

Sports Business Daily (subscription required) — So Happy Together

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