Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (54 page)

19.
“Major League Baseball learned from the NFL's experience, and took a different tack. When it created the MLB Network it did what the NFL has refused to do, and offered significant ownership interests to the major cable operators, including Comcast. Not surprisingly, from the moment of its launch, the MLB Network has been carried on the basic cable tier” (ibid.).

20.
Matt Egan, “Comcast Skates Away with 10-Year TV Deal for NHL,”
Fox Business
, April 19, 2011, available at
http://www.foxbusiness.com/industries/2011/04/19/comcast-skates-away-10-year-tv-deal-nhl/
. On Murdoch see Stanley J. Baran, “The Industrial Benefits of Televised Sports,”
The Museum of Broadcast Communications
, accessed March 3, 2012,
http://www.museum.tv/eotvsection.php?entrycode=sportsandte
. On ESPN see Richard Sandomir, “With Armstrong out, N.H.L. May Be in at OLN,”
New York Times
, July 28, 2005, available at
http://www.nytimes.com/2005/07/28/sports/hockey/28sandomir.html
. The Comcast deal “calls for the networks to televise 100 regular-season games each season and air a national NBC broadcast on the day after the U.S. Thanksgiving holiday in late November. It also includes national distribution of all NHL playoff games” (Mason Levinson and Michele Steele, “Comcast Extends U.S. NHL Rights; 10-Year Deal Said to Reach $2 Billion,”
Bloomberg
, April 19, 2011,
http://www.bloomberg.com/news/2011-04-19/comcast-said-to-agree-to-10-year-2-billion-television-contract-with-nhl.html)
. The two-billion-dollar Comcast deal “will put up to 90 regular
season games on the NBC Sports Network every year for the next ten years” (Barry Petchesky, “At the Winter Classic, a New Year Belongs to Gary Bettman,”
DeadSpin
, January 3, 2012,
http://deadspin.com/5872548/at-the-winter-classic-a-new-year-belongs-to-gary-bettman/
).

21.
“The 50 Most Influential List, 1–10,”
Sports Business Journal
, December 14, 2009,
http://www.sportsbusinessdaily.com/Journal/Issues/2009/12/20091214/Special-Report/The-50-Most-Influential-List-1-10.aspx
.

22.
Alex Sherman, “Comcast CEO's Bet on Profitable Olympics Met with Skepticism,”
Bloomberg
, June 9, 2011,
http://www.bloomberg.com/news/2011-06-09/comcasts-bet-on-a-profitable-olympics-greeted-with-skepticism-by-analysts.html
; Patrick Rishe, “Comcast/NBC Overpays for Olympic Rights: Strategically Savvy or Slightly Stupid?”
Forbes
, June 8, 2011, available at
http://www.forbes.com/sites/sportsmoney/2011/06/08/comcastnbc-overpays-for-olympic-rights-strategically-savvy-or-slightly-stupid/
; Richard Sandomir, “NBC Wins U.S. Television Rights to Four More Olympics,”
New York Times
, June 7, 2011, available at
http://www.nytimes.com/2011/06/08/sports/nbc-wins-tv-rights-to-next-four-olympics.html?pagewanted=all
.

23.
Comcast's acquisition of AT&T Broadband took it from having 8.5 million cable subscribers to placing it “in the forefront of every emerging digital media technology of the cable industry,” reported Erin Joyce, “Comcast, AT&T Broadband Close Merger,”
InternetNews.com
, November 18, 2002,
http://www.internetnews.com/xSP/article.php/1503051/Comcast+ATT+Broadband+Close+Merger.htm
. Comcast's bid was three times more than the previous rights holder, FSN Northwest, was willing to pay. See Mike Rogoway, “Comcast's Sports Channel Fuels Bidding War,”
OregonLive.com
, May 29, 2007,
http://blog.oregonlive.com/siliconforest/2007/05/comcasts_sports_channels_fuel.html
; “Comcast SportsNet, Blazers Create Network,”
Portland Business Journal
, May 21, 2007,
http://www.bizjournals.com/portland/stories/2007/05/21/daily12.html?page=all
. Once Comcast acquired the broadcast rights to the Trail Blazers, it “jacked up the fees for other cable and satellite carriers in the region to show Blazers games” (Frederick, “Comcast Is Holding Trail Blazers Fans Hostage”).

24.
Reply Comments of Verizon, In the Matter of The Regional Sports Network Marketplace
, Federal Communications Commission, MB Docket No. 11-128 (September 26, 2011).

25.
“Comcast plans to mitigate costs by charging higher adverting rates and higher distribution fees for access to its affiliated TV stations and TV networks that carry the games,” reported Diane Mermigas, “Innovative Delivery Could Make Olympics Pay,”
MediaPost
(blog), June 17, 2011,
http://www.mediapost.com/publications/article/152654/innovative-delivery-could-make-olympics-pay.html
. For a corroborating report, see Sherman, “Comcast CEO's Bet on Profitable Olympics Met with Skepticism.”

26.
“50 Most Influential People in Sports Business 2008,”
Sports Business Journal
, December 15, 2008,
http://www.sportsbusinessdaily.com/Journal/Issues/2008/12/20081215/Special-Report/50-Most-Influential-People-In-Sports-Business-2008.aspx
;
“The 50 Most Influential List, 1–10” “The 50 Most Influential People in Sports Business,”
Sports Business Journal
, December 12, 2011,
http://www.sportsbusinessdaily.com/Journal/Issues/2011/12/12/Most-Influential/1.aspx
.

27.
Stanley J. Baran, “Sports and Television,” in
The Business of Sports
, ed. Scott Rosner and Kenneth L. Shropshire (Burlington, Mass.: Jones and Bartlett Learning, 2004), 143; Baran, “Industrial Benefits of Televised Sports.”

28.
“Bill Rasmussen, ESPN Founder; CEO/Founder of College Fanz Sports Network,”
Sports Business Journal
, May 31, 2010,
http://www.sportsbusinessdaily.com/Journal/Issues/2010/05/20100531/What-I-Like/Bill-Rasmussen-ESPN-Founder-Ceofounder-Of-College-Fanz-Sports-Network.aspx
. In the 1980s, Roger Werner joined ESPN and implemented the policy of “charging cable operators, who had been receiving ESPN programming for free, small monthly fees, starting at six cents per subscriber and gradually increasing to 10 cents by 1985” (“Company Histories &
Profiles: ESPN, Inc.,”
FundingUniverse.com
, accessed March 3, 2012,
http://www.fundinguniverse.com/company-histories/ESPNInc-company-History.html
. It has been suggested that ESPN's success is due to its ability to command high fees where other companies cannot, because of its aggregation of sports programming. See Jessica Shambora, “Why ESPN Thrives Where Most Cable Networks Fail,”
CNN Money
, July 22, 2011,
http://tech.fortune.cnn.com/2011/07/22/why-espn-thrives-where-most-cable-networks-fail/
. “ESPN charges the highest per-household subscription fee of any cable channel” (Sam Schechner and Martin Peers, “Cable-TV Honchos Cry Foul over Soaring Cost of ESPN,”
Wall Street Journal
, December 6, 2011, available at
http://online.wsj.com/article/SB10001424052970204083204577080793289112260.html
. In 2011, ESPN charged cable operators $4.89 per subscriber, and was moving to increase that fee to $7. See Joseph Barracato, “Audible Groans: ESPN's $15B NFL Deal May Snap Budgets,”
New York Post
, last updated September 18, 2011,
http://www.nypost.com/p/news/business/audible_groans_agEjp5JOGPSLOVhRkFZL3I
.

29.
“Looking Back, Back, Back … ,”
ESPN.com
, accessed March 3, 2012,
http://espn.go.com/espninc/pressreleases/chronology.html
; Stuart Elliott, “The Media Business: Advertising; In a Campaign to Build Its ‘Brand Character,’ ESPN Is Playing a Provocative New Game,”
New York Times
, January 7, 1994, available at
http://www.nytimes.com/1994/01/07/business/media-business-advertising-campaign-build-its-brand-character-espn-playing.html?src=pm
; “ABC Unit to Buy Stake in ESPN,”
New York Times
, January 4, 1984, available at
http://www.nytimes.com/1984/01/04/business/abc-unit-buy-stake-espn-abc-video-enterprises-plans-acquire-15-percent-espn.html
. In 1982, ESPN signed a two-year deal to broadcast National Basketball Association games, and in 1985 ESPN signed a three-year deal with the National Hockey Association. See “Looking Back, Back, Back …” In 1987, ESPN began broadcasting National Football League games, and in 1989 ESPN began broadcasting Major League Baseball games. See “Company Histories & Profiles: ESPN, Inc.” “ESPN's combination of Sunday night football and the Major League Baseball playoffs pushed the sports network to the number one ranking in prime time among cable networks in October 1999” (ibid.). In 2011, ESPN's annual affiliate revenue was $5.57 billion. See Anthony Crupi, “Bowling Them Over: BCS Has ESPN Seeing Green; Sales, Ratings Through the Roof as Bowl Season Kicks Off,” AdWeek.com, December 20, 2011,
http://www.adweek.com/news/television/bowling-them-over-bcs-has-espn-seeing-green-137202
. On ESPN's growth in revenue over the past decade, see Associated Press, “Free Broadcast TV May Go Way of VHS Tape,”
MSNBC.com
, December 29, 2009,
http://www.msnbc.msn.com/id/34619571/#.T1J85czTOjE
. In 2008, “ESPN used its assets to outbid Fox by $100 million for the rights to carry college football's Bowl Championship Series from 2011 to 2014” and had $4.3 billion in revenue (Richard Sandomir, “Assets and Subscriber Revenue Give ESPN an Edge in Rights Bidding,”
New York Times
, November 24, 2008, available at
http://www.nytimes.com/2008/11/25/sports/ncaafootball/25sandomir.html
).

30.
Karen Hogan, “From San Fran to Philly, Comcast Sports Group RSNs Step Up to the Plate,”
Sports Video Group
, March 27, 2012,
http://sportsvideo.org/main/blog/2012/03/27/from-san-fran-to-philly-comcast-sports-group-rsns-step-up-to-the-plate/
; “This Is NBCUniversal,” NBCUni.com. accessed May 25, 2012,
http://www.nbcuni.com/corporate/about-us/
.

31.
Richard Sandomir, “Regional Sports Networks Show the Money,”
New York Times
, August 19, 2011, available at
http://www.nytimes.com/2011/08/20/sports/regional-sports-networks-show-teams-the-money.html?pagewanted=all
.

32.
“Comcast serves approximately 70 percent of MVPD subscribers in the Philadelphia DMA [Designated Market Areas], and it serves approximately 60 percent of MVPD subscribers in the Chicago, Miami, and San Francisco [DMA].”
In the Matter of Applications of Comcast Corporation
, 26 F.C.C.R. 4238 (CWA Petition, Attachment B, Declaration of Hal Singer, June 21, 2010, at 11).

33.
John Borland and Jim Hu, “Comcast Offers $66 Billion for Disney,”
CNET News
, February 11, 2004,
http://news.cnet.com/2100-01026_3-5157087.html
.

34.
Sean Gregory, “Sports Television: Why ESPN Is the Crown Jewel,”
Time
, February 23, 2004, available at
http://www.time.com/time/magazine/article/0,9171,993416,00.html
.

35.
Jessica E. Vascellaro and Matthew Futterman, “Comcast Moves Goal Posts for NBC Sports,”
Wall Street Journal
, April 15, 2011, available at
http://online.wsj.com/article/SB10001424052748704547604576263033267695112.html
.

36.
Sam Schechner, “ComcastNBC Is a Challenger,”
Wall Street Journal
, October 12, 2009, available at
http://online.wsj.com/article/SB20001424052748704882404574463712075917016.html
.

37.
Sandomir, “NBC Wins U.S. Television Rights to Four More Olympics.” The Comcast-NBCU merger will give Roberts “half a leg up” in negotiations with ESPN, according to Jeffrey L. Bewkes in an interview with the author, June 24, 2010.

38.
Shanoff, “ComcastNBC: Online Sports Juggernaut?”

39.
Viewers of the Vancouver Winter Olympics “could only access the certain live and pre-recorded coverage of Olympic events on [NBC's] web site if they already subscribed to MVPD service from one of NBC's MVPD partners. Those without MVPD subscriptions could not access this coverage because it was locked behind a ‘pay wall,’ despite the fact that, as of February 2010, NBC was wholly independent of any MVPD company” (Senator Herb Kohl to Hon. Christine Varney and Hon. Julius Genachowski, May 26, 2010, n. 4), available at
http://www.kohl.senate.gov/newsroom/comcastnbc-letter.cfm?
.

40.
Eric Benderoff, “TV in View on Web,”
Chicago Tribune
, July 5, 2008, available at
http://articles.chicagotribune.com/2008-07-05/business/0807031277_1_internet-service-provider-espn-web
.

41.
Fox News “is on track to achieve $700 million in operating profit this year, according to analyst estimates that [head of Fox News, Roger] Ailes does not dispute.” (David Carr and Tim Arango, “A Fox Chief at the Pinnacle of Media and Politics,”
New York Times
, January 9, 2010, available at
http://www.nytimes.com/2010/01/10/business/media/10ailes.html?pagewanted=all
). In 2010, Fox News was set to make more than CNN, MSNBC, and the evening newscasts of NBC, ABC and CBS combined. See Henry Blodget, “Fox News Makes More Money Than CNN, MSNBC, and NBC-ABC-and-CBC News Combined,”
Business Insider
, January 9, 2010,
http://articles.businessinsider.com/2010-01-09/tech/30010761_1_ailes-fox-news-fox-news
. A full list of News Corp.’s holdings can be found at
http://www.newscorp.com/
.

42.
News Corporation, “Chairman's Address to the 2009 Annual Meeting of Stockholders,” news release, available at October 16, 2009,
http://www.newscorp.com/news/news_432.html
.