DirecTV, MLB agree; cable companies still negotiating

NEW YORK -- Major League Baseball announced its $700
million, seven-year agreement with DirecTV on Thursday and said the
deal contains a provision that allows its "Extra Innings" package
of out-of-market games to remain on cable television if the other
incumbent providers agree to match the terms.

The president of one of those providers, InDemand's Robert
Jacobson, immediately said those terms were impossible for his
company to agree to and called it a "de facto exclusive deal."

The Federal Communications Commission has been investigating the
talks between baseball and DirecTV, which have drawn the attention
of Sen. John Kerry, D-Mass.

"I certainly would hope it would alleviate the concerns," said
Bob DuPuy, baseball's chief operating officer.

"Extra Innings" had more than 500,000 television subscribers
last year plus about 60 percent more on MLB.com, the sport's Web
site. DirecTV president Chase Carey says that there were about
230,000 subscribers to the "Extra Innings" package last year
outside of DirecTV and estimated that just approximately 5,000 of
that group would not have access DirecTV, a satellite service.

Baseball said the agreement, which must be approved by owners,
includes a provision allowing the package to remain on InDemand
Networks LLC and EchoStar Communications Corp.'s Dish Network "at
consistent rates and carriage requirements" if a deal can be
worked out this month.

"In response to those concerns of our fans, baseball has
negotiated with DirecTV to offer the package to the incumbents,"
DuPuy said. "I hope that those fans who have been directing their
concerns to us over the last several weeks will now encourage their
cable carriers to in fact enlist for this package."

DirecTV will make The Baseball Channel available when the
network launches in 2009, and DirecTV will be a minority partner in
the network.

"The provision also requires the incumbents to agree to
carriage rights to the MLB Channel proportionally equivalent to
DirecTV's commitment," baseball said in a statement. "Should the
incumbents decide not to match DirecTV's commitment, the MLB 'Extra
Innings' package will be exclusive to DirecTV."

That appears to mean Time Warner Entertainment-Advance/Newhouse
Partnership, Comcast InDemand Holdings Corp and Cox Communications
Holdings Inc. -- InDemand's owners -- would have to agree to carry
The Baseball Channel on the same tier as DirecTV and not a narrower

"We have an exclusive arrangement, if that's where it ends up.
If these guys take it up in this window, we have a non-exclusive
arrangement that works for us," Carey said. "It's significantly
less money for the non-exclusive arrangement."

Jacobson said the deal contained "conditions for carriage that
MLB and DirecTV designed to be impossible for cable and DISH to
meet." He said the agreement will "disenfranchise baseball fans
in the 75 million multichannel households who do not subscribe to
DirecTV" and "represents the height of disrespect and disregard
for their loyal baseball fans."

Baseball has said displaced subscribers could buy the package
from MLB.com, although the signal is not as good in many cases.