Time Warner Rejects NFL's Offer of Arbitration
Friday, December 21, 2007
The NFL made a new offer to Time Warner yesterday in an effort, the league said, to resolve its dispute with the cable television carrier before the Dec. 29 game between the New England Patriots and New York Giants, which is to be broadcast on the NFL Network.
The league's offer to submit the dispute to binding arbitration was rejected by Time Warner, however.
The league has remained embroiled in disputes with Time Warner and other large cable companies, including Comcast, over pricing and distribution of the league-owned NFL Network, which reaches only about 35 million U.S. households and carries eight regular season games. The stalemate has received increased attention recently because the NFL Network is scheduled to carry the Patriots-Giants game, in which New England might be trying to complete an unbeaten regular season.
The league's new offer to Time Warner came a day after Sens. Patrick J. Leahy (D-Vt.) and Arlen Specter (R-Pa.) sent a letter to NFL Commissioner Roger Goodell threatening to reconsider the sport's exemption from federal antitrust laws if deals are not struck with the cable companies to make the games carried by the NFL Network available to more viewers.
Goodell wrote in a letter yesterday to Glenn A. Britt, president and chief executive of Time Warner Cable, that the league is willing to have the dispute resolved by binding, "baseball-style" arbitration. Each side would submit a final offer to an arbitrator regarding pricing and distribution of the NFL Network, and the arbitrator would choose one of the proposals. Because the arbitration process could be lengthy, Goodell wrote, the league would allow Time Warner to distribute the NFL Network to all its customers immediately if the cable carrier agrees to submit the dispute to arbitration. The NFL's offer will remain open through Dec. 28, Goodell wrote.
"The objective is to have a neutral third party determine the price and tier for NFL Network distribution on Time Warner systems, based on the fair market value of the NFL Network program service," Goodell wrote.
Britt responded to Goodell later in the day, writing that Time Warner remained willing to carry the NFL Network on a sports tier, or make games carried on the NFL Network available to its customers on a per-game basis with the league setting the price and collecting the revenue generated. Britt also urged Goodell to move the Patriots-Giants game to a different network.
"Over the years we've been able to successfully reach agreements with hundreds of programming networks without the use of arbitration," Britt wrote. "We continue to believe that the best way to achieve results is to privately seek a resolution and not attempt to negotiate through the press or elected officials."
An NFL official said the league did not make a similar offer to Comcast because the league's deal with Comcast already allows the company to carry the NFL Network on a basic or digital basic package if it chooses. The league wants the channel carried on basic or digital basic cable, while the cable companies have maintained their customers don't want that and the channel should be on a sports tier with an additional fee for interested customers.
Under NFL rules, all games are carried on over-the-air TV in the home markets of the two competing teams.
The league also has sought the intervention of the Federal Communications Commission. It was announced yesterday that 21 members of Congress had urged FCC Chairman Kevin J. Martin to take action.
The dispute continues to draw scrutiny from Capitol Hill. In their letter Wednesday to Goodell, Leahy and Specter wrote, "Now that the NFL is adopting strategies to limit distribution of game programming to their own networks, Congress may need to reexamine the need and desirability of their continued exemption from the Nation's antitrust laws."
Leahy is the chairman of the Senate Judiciary Committee, and Specter is the ranking member.
Parcells Makes It Official
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