- The Washington Times - Thursday, April 13, 2006

Baseball fans in Washington know too well the power of Comcast.

Many Nationals fans are not able to watch most of the team’s games because the cable company refuses to carry the Mid-Atlantic Sports Network (MASN), which produces the broadcasts and is a competitor to a Comcast subsidiary.

The dispute highlights the emergence of Comcast as a key player in sports, with holdings in every segment of the industry, from distributing and producing games to owning teams and arenas.

In this region, Comcast operates Comcast SportsNet Mid-Atlantic, which broadcasts Washington Wizards, Washington Capitals and Baltimore Orioles games, as well as local college basketball and football contests.

Comcast owns similar networks in Philadelphia; Chicago; and Sacramento, Calif., and recently partnered with the New York Mets and other cable companies to produce baseball games in New York. It owns the Golf Network and recently paid more than $200 million for a three-year deal to broadcast National Hockey League games on OLN, formerly the Outdoor Life Network.

“Sports programming is popular,” said Comcast Executive Vice President David Cohen. “As a major distributor of content, we know how many of our customers like their sports.”

Comcast also is the majority owner of the Philadelphia Flyers of the NHL and Philadelphia 76ers of the National Basketball Association, as well as the minor league Bowie Baysox, Frederick Keys and Delmarva Shorebirds baseball teams. It owns the Wachovia Center and Wachovia Spectrum arenas in Philadelphia and the naming rights for the Comcast Center at the University of Maryland.

In 2004, Comcast unsuccessfully sought to buy the Walt Disney Co., which would have given it ownership of a host of channels, including the most powerful network in sports, ESPN.

But Comcast has been criticized in some cities for using its status as the top cable provider to block competitors from carrying Comcast networks, as in the case of Washington, the Nationals and MASN.

“One of the greatest complaints about the cable industry is that they use the fact that they control the pipe to control what gets on,” said Marc Ganis, president of SportsCorp., a Chicago-based sports business consultant. “There are a lot of people who feel that’s unfair.”

In its home city of Philadelphia, Comcast refused to allow competing satellite carriers such as DirecTV to carry Comcast SportsNet Philadelphia, which broadcasts most Phillies, Flyers and 76ers games.

Normally, federal regulations known as “open-access” laws do not allow providers of content to block a competitor from carrying a network if it is delivered via satellite. But Comcast found a way around that regulation because Comcast SportsNet Philadelphia is delivered terrestrially.

The result, critics said, is that competing services have struggled to gain a foothold in that city.

“The idea is that you lock up the content and then deny that content to a rival,” said Hal Singer, an economist who has represented MASN in its battle with Comcast. “Once you do that, you lock in customers. They’ve perfected this strategy in Philadelphia.”

Comcast officials say Philadelphia is the only city in which competitors cannot broadcast Comcast channels and that having exclusive content is common in the industry. DirecTV, for instance, is the sole provider of the National Football League’s Sunday Ticket package, which offers live broadcasts of every game.

“Some level of exclusive programming has value in the competitive marketplace,” Mr. Cohen said.

Industry analysts also said it’s unfair to criticize Comcast for owning both distribution and content because that now is a common practice. Rupert Murdoch’s News Corp., for example, owns DirecTV as well as the Fox network and Fox News Channel and also is the largest owner of regional sports networks. Time Warner operates a major cable system and owns a major movie studio, the WB Network, TBS and TNT.

“The conventional argument is that you don’t want one company to get too powerful,” said Adi Kishore, a media and entertainment analyst with the Boston-based Yankee Group. “But the realistic argument is that you’ve already seen that happening.”

Comcast last year reported net income of $928 million, down from $970 million in 2004. But its revenue rose from $20.3 billion to $22 billion during that year. It pulled in $919 million in revenue from its networks, an increase of 16.7 percent over 2004. In addition to the Golf Network and OLN, Comcast produces the E! Entertainment channel, the Style Network and the G4 and AZN Television channels.

Comcast’s size has made it a major target of Nationals fans and MASN, which last week called the company a “corporate bully” for refusing to carry the network.

“They’ve got all the assets that give them market power and also control the last mile to the customer,” said Mark Cooper, research director for the Consumer Federation of America. “There’s no doubt that holding on to every one of the levers of market power is what they’re about.”

Comcast officials say their stance in the MASN debate has less to do with competitive pressure and more to do with fairness: They say Comcast SportsNet should have been given the rights to compete for the Orioles’ broadcast rights after 2006, when those games will be picked up by MASN. Comcast also said MASN was charging too much for its broadcast rights, especially because it has yet to offer programming other than baseball games.

“It is massively overpriced for a regional sports network that has nothing other than Nationals games,” Mr. Cohen said. “The network does not provide a legitimate value proposition for our customers.”

At a congressional hearing last week, Orioles owner Peter Angelos said he would consider an “amalgamation” of Comcast SportsNet and MASN, and Comcast officials said they are open to that possibility.

“At the end of the day, the best models for regional sports networks involve cooperation, because there’s always been suspicion that the other side is making all the money,” said John Mansell, a sports and media analyst with Kagan Research.



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