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Cable Operators

Small Ops’ ESPN Deadline: Tuesday

6/13/2004 5:00 PM Eastern

Facing a Tuesday deadline, smaller cable operators are hopping on board for a new carriage deal with ESPN, although some are complaining that they’ll have to shuffle their channel lineups and buy equipment in order to fulfill the terms of the pact.

Members of the NCTC -- a buying group of small independent operators that represents roughly 15 million subscribers -- have until Tuesday to decide whether or not to participate in the co-op’s new, long-term master affiliation contract with ESPN. The NCTC has 1,100 member companies.

“The vast majority of our members have chosen to participate in the new ESPN agreement, and we believe more will do so up until the Tuesday deadline,” NCTC spokesman Dan Mulvenon said, declining any additional comments.

The NCTC’s new ESPN contract, which runs through 2014, reportedly calls for annual license-fee increases in the neighborhood of 7% -- way below the 20% hikes that were part of the old contract.

NCTC members such as Cable One Inc., Cebridge Connections, Buckeye CableSystem, Massillon Cable TV and New Wave Communications are among those that have confirmed their participation in the new ESPN pact.

One of the NCTC’s largest members, Adelphia Communications Corp., plans to negotiate its own pact with ESPN for the programmer’s core channels, according to an MSO spokesman.

Mediacom Communications Corp. is still looking at the cooperative’s ESPN pact.

The co-op’s revamped ESPN deal, announced in March, is similar to affiliation agreements that the giant sports programmer forged earlier this year with MSOs such as Cox Communications Inc., Charter Communications Inc. and Cablevision Systems Corp.

While the new ESPN contracts give cable operators a break on annual rate hikes, systems in exchange must launch the programmer’s additional services and hit penetration benchmarks.

And while cheaper than the old pact, the new arrangement is still pricey, according to some critics. ESPN is getting its annual single-digit increase on a base rate of roughly $2.60 per month, per subscriber, in addition to getting fees for its additional channel launches.

ESPN confirmed the NCTC’s assertion that co-op members have embraced the new contract.

“The majority of NCTC members have opted in the agreement, and we are literally swamped with more elections every day,” ESPN spokeswoman Katina Arnold said. “No one is being forced to move in, and operators can remain in the current agreement if they would like, since everyone is under contract.”

For some small operators without deep digital penetration, the complicated new ESPN deal essentially means they have to carry ESPN, ESPN2 and ESPN Classic on basic, with requirements that the networks be adjacent and positioned on lower-numbered channel slots, reportedly below 30.

For more on the NCTC’s deal with ESPN, please see Linda Moss’ story on page one of Monday’s edition of Multichannel News.

 

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