Extra Innings update

It now appears there is a faint ray of hope that EI won’t be moved off of cable to an exclusive DirecTV agreement.

Money/CNN article on the EI wheeling and dealing

(excerpt)

"The controversy comes because
DirecTV is trying to get an exclusive contract to carry the MLB
package, as it already has with the NFL. That has raised criticism and
threats of legislative action by Sen. John Kerry, D-Mass., along with a
statement by Federal Communications Commission Chairman Kevin Martin
that he is also concerned with the expected change.

Both men, as
well as an estimated 180,000 baseball fans who subscribed to Extra
Innings last year on cable and 50,000 fans who did so with the
competing satellite service from EchoStar Communications (Charts), might get their wish without a change in legislation.

One
source familiar with negotiations said he now believes that the Extra
Innings package will remain available to all three services.

"I’d be surprised if the DirecTV deal goes through," he said.

The
key isn’t likely to revolve around more money, but an agreement by the
cable operators to provide broader carriage for a Baseball Network
which MLB intends to start operating in 2009.

DirecTV had been
willing to let all 15 million of its subscribers have the new Baseball
Network right from the start, as well as helping with some of the
start-up costs, according to multiple sources. It isn’t willing to be
as helpful to MLB’s upstart network if it doesn’t gain the advantage of
an exclusive deal on Extra Innings, though.

But after initially
rebuffing the MLB demands for carriage of the Baseball Network, the
cable operators are now coming around, according to the industry source.

"There
will be a commitment to carry the Baseball Network (on cable)," said
the industry official. "Where it will be placed, that still needs to be
sorted out."

Another source with the league said he was not aware
of any shift away from plans to go with an exclusive deal for DirecTV.
But talks have lingered for months without an official announcement
even as baseball’s opening day draws near.

A non-exclusive deal
would not only reduce the risk of any interference from Washington. It
will also allow baseball to not anger more than 200,000 of its most
loyal customers who would have to shift television services to keep
following their teams.

The motivation for the exclusive deal has
been reported — incorrectly — as baseball’s desire to get the top
rights fee for the Extra Innings package.

The big cable
companies, which collectively own a service called In Demand that airs
the Extra Innings games, were reportedly willing to pay $70 million a
year for a non-exclusive deal.

And while DirecTV won’t offer $100
million for a non-exclusive deal, it seems safe to say that it and the
Dish Network, along with the telephone companies that are making their
own push to provide television service, would easily pay more than $30
million combined for non-exclusive deals.

Plus, it’s not as if
DirecTV is likely to take a big financial hit if it doesn’t get an
exclusive MLB contract. Sources familiar with subscription numbers say
that DirecTV already has 270,000 Extra Innings customers…more than
the cable companies. Assuming DirecTV can hold onto all these
customers, that works out to $50 million in subscriber fees.

There
hasn’t been as much heat over DirecTV’s exclusive contract with NFL’s
Sunday Ticket, but that’s because that has always been an exclusive
deal. But that doesn’t mean the cable operators have given up hope
getting into that deal as well."