The National Cable Television Cooperative last week finally
nailed down a master carriage agreement with one of its major holdouts, ESPN.
The eight-year distribution agreement will cover ESPN,
ESPN2 and ESPNews. ESPN Classic Sports has also extended its deal with the co-op, the
members of which represent about 8.5 million cable homes, officials said.
"It's a big deal around here," said Frank
Hughes, the NCTC's senior vice president of programming. "It's almost of
historic proportions."
The NCTC gets rate-card discounts from programmers for its
small-cable-operator members based on their combined distribution, basically acting like a
large MSO.
In addition to giving volume-rate incentives to the NCTC,
ESPN will also create specialized promotional campaigns for the co-op and its members
through the sports network's multimedia platform, which includes the four video
networks, ESPN Radio, ESPN-The Magazine and its ESPN SportsZone Web site.
For example, a cable operator adding ESPNews to a new tier
might also be able to offer cable subscribers a free subscription to ESPN-The Magazine
as an incentive to buy the new package.
The NCTC has been in serious talks with ESPN since the
spring, Hughes said.
Asked why ESPN finally did a co-op deal, vice president of
affiliate relations Sean Bratches said, "We have agreements with a vast majority of
the NCTC's members. We decided to begin discussions with the NCTC at the request of
an exorbitant number of affiliate clients who wanted us to do a deal with this
consortium."
ESPN and the NCTC wouldn't discuss the details of
their agreement, but it reportedly won't spare the NCTC's members from the 20
percent license-fee increase that the sports network unveiled earlier this year for its
affiliates.
That 20 percent hike will push ESPN's rate card from
its current 85-cent to 95-cent range to more than $1 per subscriber, per month for
affiliates. But at least now, NCTC members can get volume-license-fee discounts, which
they couldn't obtain by negotiating with ESPN individually.
ESPN has long-term deals, reaching well past the year 2000,
with systems representing about 70 percent of its subscriber base, Bratches said.
Nearly 80 cable networks have affiliation deals with the
NCTC, which was founded in 1984, but ESPN was one of the major holdouts. ESPN Classic
Sports had signed a deal with the co-op before it was acquired by ESPN, when it was known
as Classic Sports Network.
The NCTC is also negotiating to reach a deal with Disney
Channel, which, like ESPN, is owned by The Walt Disney Co.
Some of the other major programmers that don't have
agreements with the NCTC include USA Network, A&E Network, WGN, Lifetime Television,
The Nashville Network and Country Music Television.
