A group of 30 Connecticut state legislators have crafted a letter to Comcast chairman and CEO Brian Roberts and Yankees Entertainment & Sports Network chief Tracy Dolgin to put aside their differences and work out a deal to bring the regional sports network back to viewers in the state by April 4, the start of the New York Yankees regular season.
YES and Comcast have been at an impasse since Nov. 28, when the RSN’s contract with the cable operator expired. The blackout has affected about 900,000 Comcast customers in New Jersey, Connecticut and Pennsylvania.
In the letter, authored by State Rep. Sean Scanlon (D-Guilford), the legislators pointed out that the Yankees are Connecticut’s most popular baseball team – 44% of state resident claim an allegiance to the pinstripes, according to a Quinnipiac University poll – and viewership of YES was up about 20% last season, according to Nielsen.
“Hundreds of thousands of our constituents rightfully expect to have the ability to watch Opening Day from the comfort of their homes on April 4, 2016 and we hope you will put aside your respective differences between now and then to ensure Connecticut’s Yankees fans – including all of boys and girls who are just learning to love the game – are not denied access to the 2016 season,” the letter stated.
The legislators’ lament comes just a day after YES stepped up its campaign to encourage Comcast customers in the affected markets to switch providers, encompassing a print, radio and TV blitz that urges “Xfinity Strikes Out. Drop Comcast Today.”
In a statement, YES network said it was more than willing to restart talks with the distributor.
"YES Network sincerely appreciates the efforts of Connecticut legislators and leaders across the region to help get our network back on the Comcast lineup," Dolgin said in a statement. "We are particularly grateful for their recognition of the indisputable fact that the New York Yankees are extremely popular with viewers and that the YES Network's ratings are consistently among the highest of any channel on television when the Yankees are playing. For our part, we were extremely surprised and disappointed when Comcast unilaterally dropped YES in the dead of night last November, and we stand ready to negotiate a deal with Comcast immediately.:
Earlier this week Dolgin made the local media rounds, offering little encouragement that a deal could be reached in time for the first pitch of the regular season.
“Hope is not a strategy,” Dolgin told the New York Times. “You have to find another provider.”
This isn’t the first dispute between YES and a New York area distributor. YES was dark to Cablevision Systems customers for more than a year before reaching a deal less than 30 minutes before the first pitch on Opening Day in April 2003. And Dish Network, which has balked at high sports charges, has never carried the channel. It also has never carried MSG.
Comcast has held that price is the main issue – according to SNL Kagan YES is the priciest RSN in the country at $5.36 per subscriber per month – and that it can’t justify what it says is the network’s demand for a 33% increase in affiliate fees. In the past Comcast has said its subscribers in the New York metro area don’t watch YES, and haven’t complained that the network has gone dark.
But that was during the NBA season – YES carries the Brooklyn Nets, which have had a difficult year. The startup of the baseball season may raise the hackles of die-hard Yankees fans.
Dolgin told the Times that Comcast had been paying the increased price for more than nine months – originally its carriage deal expired in February 2015, but continued to carry the channel through a series of short extensions.
In an interview, Comcast Cable executive vice president, consumer services Marcien Jenckes confirmed that Comcast had agreed to pay the increase, but was only during the extension period. The operator, he said, had hoped to work out a more favorable long-term deal.
“Our intention going into that discussion was to bridge the value gap,” Jenckes said, adding that Fox’s recent moves weren’t surprising given the network has been off Comcast systems since November.
When it became apparent that wasn’t going to happen, Comcast dropped the channel.
“The important thing to note is in the history of Comcast Cable, this is the first cable network we ever dropped,” Jenckes said.
Some observers have hinted that Comcast may have been more willing to absorb the increase early last year when it was still moving forward with its planned merger with Time Warner Cable, which has more than 1 million subscribers in the New York market. But that doesn’t explain why the company would continue to pay the increase past April, when it officially backed away from the TWC deal.
Jenckes admitted that Comcast’s priorities changed after it abandoned the TWC merger.
“The dynamic with Time Warner Cable does change what we feel we have to do in the New York market,” Jenckes said.
Cable operators have increasingly pushed back at rising programming costs, and YES isn’t the only RSN that has lost carriage as a result. In the Los Angeles market, several operators have refused to carry Time Warner Cable’s SportsNet LA, which carries Los Angeles Dodgers baseball games, because of high fees.
Operators have been able to partially offset high RSN fees through monthly surcharges and Comcast, which had implemented a $1 per month RSN surcharge recently raised that fee to $3 per month. Jenckes said that increase had nothing to do with the YES dispute, adding that the increase does not come close to recouping the fees the operator doles out for sports channels. There are four RSNs in the New York market including YES – SNY, MSG and MSG-Plus.
Comcast, like other distributors, also raised rates across its footprint by about 4% this year, mainly to partially offset overall programming costs, which were up 7% in 2015.
YES has disputed Comcast’s claims – it insists that Yankee fans are loyal watchers of the telecasts and cited Nielsen data that say ratings in Comcast households were up 21% in the second half of the 2015 season. According to YES, the network is the most-watched RSN in America and in the New York market the channel’s audience has been 69% greater than rival network SNY (home of the New York Mets) which Comcast distributes and in which it owns a minority interest.
While the battle appears to be over rates some people familiar with the network say other issues are involved as well, including most-favored nation status, which would ensure that no other distributor would get a better rate than Comcast. MFNs are usually given to the largest distributors in a market and Comcast, which is the largest cable operator in the country, doesn’t have the biggest footprint in New York. That designation would belong to Time Warner Cable and Cablevision Systems.
Jenckes said pricing is the main issue in the dispute adding that Fox Sports Networks Group, which owns a majority interest in YES and is heading up negotiations, is also attempting to “tie in things related to other networks.” He declined to elaborate.
YES denied that any other networks are being tied to its carriage negotiations.
“There’s no connection whatsoever,” YES said in a statement. “That’s just a smokescreen by Comcast to hide the fact that it broke its promise and dropped YES after agreeing to pay the fair market rate. In fact, when Comcast dropped YES last November, its statement made no mention of anything other than YES.”
Jenckes said the parties had been negotiating as recently as three days ago, adding that Fox must have felt the talks weren’t going the way they expected, hence the ad campaign.
“Our intention going into that discussion was to bridge the value gap,” Jencks said, adding that Fox’s recent moves weren’t surprising given the network has been off Comcast systems since November.
