New York -- NBC Cable has signed 10-year contract
extensions including surcharges for Olympic Games programming with 150 cable operators and
satellite providers.
There are still several key holdouts, though, including
three of the top seven U.S. MSOs.
All of the deals include carriage of MSNBC and CNBC, as
well as retransmission consent for NBC. NBC Cable also scored distribution "in many
cases" for new digi-net CNBC Biz 24 and ValueVision, the home shopping network NBC
partly owns, which it is renaming SnapTV, NBC Cable president David Zaslav said.
The first key carriage deals signed this past summer
included AT&T Broadband & Internet Services, DirecTV Inc. and Cox Communications
Inc.
Additional deals are with Adelphia Communications Corp.,
Charter Communications Inc., Insight Communications Co. Inc., RCN Corp., Grafton Cable,
Pegasus Communications Corp., Service Electric Cable TV Inc., U.S. Cable, Prime Cable, HBO
Direct, Raystay Co., Buena Vision, Benchmark Communications, Massillon Cable and Corporate
Media Partners, which represents Ameritech New Media, BellSouth Corp., GTE Corp. and
Southern New England Telecommunications Corp.
Top MSOs that have not agreed to the long-term renewals and
Olympics fees include Time Warner Cable, Comcast Corp. and Cablevision Systems Corp. Time
Warner's talks with NBC are ongoing, spokesman Mike Luftman said.
Last month, the National Cable Television Cooperative --
which purchases programming for more than 1,000 operators with more than 10 million
subscribers -- told members it doesn't plan to cut a deal with NBC because the new
rates and Olympics surcharges are too expensive, NCTC vice president of programming Frank
Hughes said.
Hughes added that he decided to pass on a Dec. 3 ultimatum
NBC Cable gave the NCTC for agreeing to the deal. "They're just going to have to
get realistic about this. If they do, maybe we can conclude something. If they stick to
what they're offering, we're done talking," he said.
Asked about the NCTC's stance, Zaslav said, "We
are hopeful that we get deals done with everybody in the marketplace."
Hughes said he told NCTC members they would have to cut
deals directly with NBC if they want to receive the Olympics programming. Another source
said close to 100 of the deals NBC has cut so far are with NCTC affiliates.
Most operators currently pay monthly rates of 10 cents per
subscriber for MSNBC and 15 cents for CNBC.
The costs for CNBC and MSNBC will increase about 2 cents
per subscriber each month under NBC's new rate card. By 2008, MSNBC will cost 32
cents per subscriber and CNBC will cost 39 cents.
But NBC's Olympics surcharge will cost cable operators
and satellite providers up to an additional $1.68 per subscriber each year.
Operators that signed contracts by Aug. 1 were given
charter rates, which included monthly surcharges of 5 cents each for MSNBC and CNBC. The
surcharge has increased to 7 cents for each network, and a source said the surcharge will
not be increased again.
Cable operators will be able to sell three minutes per hour
of local avails on both CNBC and MSNBC during the Olympics programming.
NBC plans to offer 273 hours of Olympics programming on
CNBC and MSNBC through a separate satellite feed. Operators that don't go for the new
deals will be offered reruns of regular CNBC and MSNBC programming.
Not closing deals with top MSOs such as Time Warner and
Comcast before this summer's Olympics Games in Sydney, Australia, would obviously be
a huge loss for NBC, which agreed to pay $3.5 billion for Olympics rights through 2008.
But Zaslav remains optimistic.
"Our expectation is that more and more distributors
are going to sign up between now and the Olympics," he said.
Even though ratings for many networks stand to decrease
during the new decade due to viewer fragmentation, Zaslav said the long-term aspect of the
deals hasn't been an issue during negotiations.
"The Olympics, even in a fragmented marketplace, is
likely to be the most compelling television shared experience that we have over the next
10 years," he added.
