Monday, January 22, 2007

Exclusive Dealing

Well, this sucks.

Word on the street is that MLB is close to assigning the rights to its "Extra Innings" package, which allows fans to watch out-of-town games on a nightly basis, to DirecTV on an exclusive basis, similar to the deal that DirecTV has with the NFL and its "Sunday Ticket" package. As a Red Sox fan living outside of New England, who doesn't and won't have DirecTV, this is terrible news.

Fans without access to DirecTV will still be able to purchase the mlb.tv package which delivers the same set of games to your computer desktop for $79 for the season, along with all the problems associated with streaming video (low quality, freezes, drop-outs, etc.).

Now, this is clearly an anti-competitive move, as most (all?) exclusive-dealing contracts are, as it restricts the capability of cable companies and other satellite providers (as well as phone companies, which are now starting to deliver TV) to compete with DirecTV. That said, it's not clear than anyone will do anything about it, as DirecTV's exclusive deal with the NFL has been around for a long time and was renewed with little fanfare or investigation recently, although Gregg Easterbrook, the Tuesday Morning Quarterback, regularly complains about it. (Side note: reading TMQ implies that he has seen every game each weekend, yet he regularly complains about not having DirecTV and thus not being able to see the games he wants. How does this work?)

Recently, however, Arlen Specter has threated the NFL with legislation stripping it of its antitrust exemption as a means of getting it to get rid of its exclusive deal with DirecTV. I wonder if Mr. Specter is as big a baseball fan as he is a football fan? I hope so, because absent something like that, these types of deals will continue. As Joe Sheehan points out at Baseball Prospectus (gated):
You simply don’t go from being such a big fan of baseball that you would
purchase 1200 games a year on satellite to a non-fan based on one decision.

That is, if DirecTV can make up the extra payment in new subscribers (because people who subscribe to these things are, almost by definition, fanatical enough to switch TV providers to get the games), then it's a win-win for them and the leagues. Because the leagues get increased revenue, and only piss off fans who are going to be fans no matter what, which carries very little loss. I'm a big enough Red Sox fan to pay for Extra Innings, which means I'm a big enough Red Sox fan to remain one even if the games are only available on my laptop, or not even available at all.

Fortunately, US lawmakers are all living outside of their home team's braodcast zone, and so any Senator or Representative that wants to watch their local team plays either needs DirecTV or to threaten these deals with legislative action. I guess we'll see how many fanatical sports fans there are in Congress...

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