NFL’s Case Against Comcast Centers on ‘Threats’
Wrapping up testimony for the NFL in its program- carriage case against Comcast (CD April 16 p5) at the FCC, the league’s highest-profile witness homed in Thursday on what he had taken as threats from Comcast’s CEO. Paul Tagliabue was the NFL commissioner when it negotiated with Comcast over rights to eight games the league later decided to distribute on its own network. He said Comcast CEO Brian Roberts took the news hard, issuing “not-so thinly-veiled threats” that underlie the league’s concern that Comcast favors its sports channels over the NFL Network, which now has the games. Roberts said no threats were made.
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Roberts seemed interested in giving the eight games “the widest possible distribution” when a joint venture of the cable operator and the league to handle them was under discussion, Tagliabue testified. That changed Jan. 27, 2006, when Tagliabue told Roberts, after months of negotiations between them, that the league’s owners had decided to keep the games, he said. Tagliabue said Roberts told him by phone that day that the decision “was not going to be positive for the relationship between the NFL and the cable industry going forward.”
Roberts was saying “'Don’t expect business as usual,'” Tagliabue testified. “'Your life is going to be complicated.'” When Roberts mentioned the cable industry, he seemed to be talking about the other major operators, Tagliabue said. Questions from Chief FCC Administrative Law Judge Richard Sippel, Comcast lawyer Michael Carroll, and Gary Schonman, an Enforcement Bureau lawyer, touched on whether Roberts used threats or standard negotiating tactics. Schonman asked whether Tagliabue tried to get Roberts to clarify whether he was speaking for Comcast only or for the industry. “If someone’s threatening you, you don’t ask to be more specific,” Tagliabue replied. “I'm not masochistic.”
Carroll and Sippel asked whether Tagliabue remembered details of a carriage contract for the NFL Network, which Comcast later cited in moving that channel to a less-popular programming package. “You were totally out of the loop?” Sippel asked. Tagliabue said some decisions were left to senior NFL executives. He and Carroll sparred over Tagliabue’s claim that Comcast moved the NFL Network to a package available to fewer subscribers. Not so, Carroll said, because anyone could buy that package. “It’s not widely-distributed in the way that Mr. Roberts and I talked about,” Tagliabue said.
Sippel wondered whether Roberts’ heated comments during his conversation with Tagliabue were more about “blowing off steam” instead of a scare tactics. “He was disappointed with the way things were going,” Tagliabue said. The judge asked why Tagliabue didn’t talk with Roberts in person. Tagliabue said he was in New York and Roberts in Philadelphia.
Roberts confirmed that he and Tagliabue held many calls and meetings about having the Outdoor Life Network, now called Versus, show the eight regular-season football games. But he said he doesn’t remember saying the league’s dealings with the cable industry would get “complicated” or “very interesting” because the two sides couldn’t reach agreement. He said he told Tagliabue “I was disappointed and, as I had before, that I foresaw the NFL was likely to continue to face difficulties persuading cable operators to provide NFLN with broad distribution” because the eight games would increase the channel’s price but not their appeal to viewers. “I never threatened to place NFLN on a sports tier” and doing so wasn’t “motivated by any desire to retaliate against the NFL,” Roberts said in prepared testimony. He’s expected to testify Friday.