Canzano: Drilling into Comcast dispute with Big Ten Network

Source: "There’s more in play here.”

Oregon and Washington are scheduled to play on the Big Ten Network on Saturday. (Photo: Serena Morones)

An ongoing dispute between the Big Ten Network and Comcast blew into public view this week. Fox is involved, too. I spoke with multiple sources and came away shaking my head at the absurdity and irony.

Oregon, Washington, UCLA, and USC fled the Pac-12, in part, because of poor television distribution. Now, the Ducks and Huskies are preparing for their first Big Ten games on Saturday and find themselves mired in an aggravating TV distribution fight.

Said a source on the Comcast side: “Fox stacked those football games on the Big Ten Network in Week 1 on purpose.”

Said another: “I will deny I ever said this if anyone asks, but yes, there’s more in play here.”

Caught in the middle of the dispute?

Comcast Xfinity subscribers in Oregon, Washington, Southern California, and other pockets. Consumers may soon discover that live sporting events are blacked out, even if they paid a $10 fee to upgrade to a sports tier. Fans are faced with either dumping Comcast and cutting the cord, or waiting out what one industry expert called “a game of chicken.”

Here’s what I know:

• The Big Ten Network is a joint venture between Fox Sports and the Big Ten. Fox owns 61 percent. The network is doing the negotiating with Comcast, per sources.

• Oregon, Washington, UCLA, and USC officially joined the Big Ten in August. Those four new markets were previously considered “outer markets” by Comcast. The distributor paid a modest monthly carriage fee to the Big Ten Network (estimated to be somewhere in the 15-25 cents per subscriber range) to carry live games in those markets.

• Previously, in those four TV markets Comcast situated the Big Ten Network on its “More Sports and Entertainment” tier. It charges a $10 upgrade fee and bundles it with a bunch of other sports stations for value.

• Now, the Big Ten Network (Read: Fox) views those schools as an “inner-market” just like the other 14 conference schools. The monthly carriage fee for in-market live sports programming is much higher (think: $1.25 to $1.50 per month).

• Fox wants Comcast to not only pay the higher “inner-market” rate but also include the Big Ten Network on its basic tier like other carriers (Read: DirecTV, Hulu, Fubu, YouTube TV, etc.). The channel would not only be available to all Comcast subscribers, Fox would be entitled to the ($1.25 per subscriber) fee from all customers, not just those who paid for the sports upgrade.

• The Big Ten Network needs Comcast to take the same deal it has with DirecTV, Hulu, and others. There are a couple of reasons why:

1. All the carriage agreements include a “most favored nations” clause. If the Big Ten Network allows Comcast to distribute “inner-market” live games at reduced “outer market” rates the other distributors are entitled to the more favorable terms.

2. When Fox agreed to take the four Pac-12 schools and pay millions in additional media-rights fees, it penciled out the math using “inner-market” distribution rates.

• The Big Ten Network has blacked out live games and wants Comcast to accept the new “inner-market” terms and rates like everyone else. Comcast is pushing back.

• A spokesperson for Comcast told me in a statement: “We’re sensitive to the impact these costs have on our customers and have been in discussions with FOX and The Big Ten Network to find a solution to make certain former Pac-12 games available to the people who want them while not forcing others to pay for content they don’t want to watch.”

• Comcast and Fox are trying to resolve the disagreement. It’s possible this could be resolved before Saturday’s kickoffs. It’s also possible it could drag on for weeks or months. Similar carriage issues took place when Nebraska, Rutgers, and Maryland joined the Big Ten. Those were eventually resolved.

Canzano: Comcast Xfinity with first fumble of Big Ten season

• Bob Thompson, the former Fox Sports Network President, called it “a game of chicken.” Thompson made an appearance on KJR radio in Seattle and explained media companies and distributors play chicken with each other all the time. This isn’t unusual. In fact, the four new Big Ten schools endured a similar dispute involving DirecTV and the Pac-12 Network. That one lasted more than a decade. Thompson wondered if this tiff might get settled by Friday night.

• As one Big Ten source told me: “Football has a way of moving the needle.”

• The Big Ten Network is directing fans to a website that will determine if you’re in one of the affected areas. All you have to do is enter your zip code to see if you’re affected by the blackouts. This is an old trick that helps put some pressure on Comcast. I suspect its customer service representatives went home from work on Tuesday after hearing from a pile of angry customers in the Pacific Northwest and Southern California.

• If you’re paying for the $10 sports-tier upgrade at Comcast, you still may be affected by the blackouts. You’ll get the Big Ten Network, sure. The games will still show up in your guide. But when you try to tune in on Saturday, you may not get any live sports programming involving Oregon and Washington’s football teams. A Big Ten Network source wondered if Comcast would instead air Iowa’s season-opening game vs. Illinois State.

• I spoke with Patrick Crakes, a long-time media consultant, on Tuesday. Crakes told me in our 1-on-1 interview that Comcast probably has a number in its head that will trigger a resolution.

“I do think complaining (and canceling) registers with them,” he told me. “They understand this could hurt them. They’ve made calculations about how much pain they can take.”

• As we kicked it around, Crakes said something else about Comcast that caught my attention. He said: “They may want something from Fox. There’s a lot to negotiate with Fox. That’s one of the great things about having a lot of stuff — there’s a lot of routes to a deal.”

• I reached out to sources at Comcast and Fox on that front and learned that the carriage contract between those two entities is coming to an end. It’s about to be up for renegotiation.

One source said: “I will deny I ever said this if anyone asks, but yes, there’s more in play here.”

• Every team in the conference will appear on the Big Ten Network at least twice, per season. A source at Comcast told me the carrier is convinced that the Big Ten strategically scheduled the Oregon and Washington openers to appear on the network to help apply pressure on the carriage negotiation.

The source said: “Fox stacked those football games on the Big Ten Network in Week 1 on purpose.”

• Fans of the four new Big Ten schools endured the DirecTV saga with the Pac-12 Network. I suspect they’ll have little patience with this fight. Particularly given that there are so many alternatives. But the irony of the four schools that chased wider distribution and more revenue finding themselves stuck with a lousy distribution deal wasn’t lost on the world.

• Oregon State’s athletic department posted a clever tweet on Tuesday, throwing some salt on the wound. It got laughs. The Beavers noted that Oregon State football on The CW was “Available Nationwide” and included a barb of a tagline … “(even on Comcast).”

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