Tennis Channel Costs Outweigh Benefits of Wider Comcast Carriage, Executive Says
The many millions of dollars in higher expenses from carrying the Tennis Channel more widely on Comcast systems far outweighed any benefit the cable operator would get from striking the deal the independent programmer sought, a Comcast executive testified late Thursday afternoon. It appears that few or no cable subscribers would cancel their service if they couldn’t get the sports channel on popular programming packages, said Greg Rigdon, hired by Comcast to begin overseeing cable programming starting in February 2011. Likewise few customers would sign up if the channel were available more widely than on the sports tier, where it costs $5 a month, he said.
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Earlier at an administrative law judge hearing of the Tennis Channel v. Comcast program carriage case (CD April 27 p5), an FCC official had many questions of another witness for the defendant. Gary Oshinsky of the Enforcement Bureau seemed skeptical of how industry consultant Michael Egan suggested the channel had less popular programming that Comcast’s Golf Channel and Versus. The plaintiff contends Comcast favored those programmers over the Tennis Channel. In past program carriage cases, the bureau has recommended what decision the ALJ make. The ALJ then recommends what the commission should do.
A cost-benefit calculation against moving the Tennis Channel off the sports tier also held at Charter Communications, where Rigdon oversaw programming acquisition until being hired by Comcast, he testified. At his current employer, “I saw no evidence that that would happen,” he said of the prospect of new customers adding Comcast as their cable provider because of the Tennis Channel being widely distributed, “which was consistent with my experience at Charter.” Of customers turning off service for AT&T, DirecTV, Dish Network or Verizon pay-TV, “I haven’t worried about that at Comcast, and I didn’t worry about that at Charter,” Rigdon said.
"This has not been flagged as one of the issues that is causing subscribers to leave us,” Rigdon said of Comcast. He cited discussions with local executives at systems owned by the company. Wider distribution of the Tennis Channel “would only impose an incremental expense” on Comcast, with higher fees paid to that programmer because more of the cable operator’s subscribers would have access to it, he testified. That would amount to many millions of dollars of higher expenses, he said, without saying over what period of time. Before he could say more, Comcast’s attorney reminded him he was speaking in open court. Confidential information on the case has been discussed only during testimony that’s closed to the public.
"There’s no compelling business rationale” to move the Tennis Channel from the sports tier to one that’s purchased by many more Comcast subscribers, Rigdon said: “There is no consumer demand to have the Tennis Channel carried on a broader-distributed tier.” Chief FCC ALJ Richard Sippel, overseeing the hearing, asked Rigdon about who at Charter made the decision to put the network on the sports tier. He replied that he primarily worked with field executives and the chief marketing officer, and that the CEO signed off. Comcast and the Tennis Channel agreed on what testimony Rigdon could submit, after the plaintiff objected in a filing earlier this week, said Michael Carroll, a lawyer representing the cable operator.
Egan’s testimony focused on differences between the Tennis Channel and Comcast’s Versus and Golf Channel. Versus shows 20 different sports, while the Tennis Channel is devoted to one, he noted. About 70 percent of viewers of both Comcast programmers are men, while the Golf Channel attracts more women, Egan said.
The bureau official asked how Egan arrived at his comments about what audiences were attracted to the shows on the various channels. Oshinsky asked Egan how he knew people were more interested in live or same-day programming -- which the expert said comprised a larger part of the Golf Channel’s lineup than on the Tennis Channel -- when he hadn’t looked at ratings. “From all of the evidence around me,” Egan replied. Oshinsky said it “sounded like you were talking about the value of the programming based on your likes.”