No matter who wins cable rights, figure that you'll be the loser

Media Watch

September 26, 1996|By Milton Kent

Say someone offers you $10,000 and a convertible. Then say another person offers you enough cash to buy a car and have $10,000 left over. Have you received the same offer?

If you can answer that, you're well on the way to cutting through the confusion that surrounds the negotiation for cable television rights to the Orioles, Washington Bullets and Capitals.

Here are some other questions and answers, as best as they are available:

Who are the players? On one side is incumbent Home Team Sports, whose majority owner is Westinghouse, which also owns CBS and Infinity radio and has carried the three teams since it went on the air in 1984. On the other is the brash, new challenger, a joint venture to be operated by Fox and TCI, the nation's largest cable operator, which now runs nine HTS-like channels around the country.

What's at stake? At first blush, the answer is easy. All that appears to be involved is where local sports fans will see any games of the local baseball, football and basketball teams that aren't carried by a broadcast network, a local over-the-air station or ESPN.

But, like everything else attached to this proposition, nothing is easy. The independent fate of HTS and the job status of a number of its employees are probably on the line in this tussle.

Where will Orioles games be seen? That's a darn good question. Though no one on any side will make any public pronouncement, sources close to the situation say Fox/TCI is holding a 10-year contract with the team, which would appear to make things pretty cut and dried, right?

Well, maybe not. The Westinghouse/HTS people believe they have met Fox/TCI's financial offer to the three clubs, believed to be in the neighborhood of $230 million, hence last week's announcement that HTS had matched the proposal.

The teams, of course, must officially designate their carriers, but if HTS has matched the offer and if the language in their current contracts with the clubs gives them the opportunity to do so, then it would seem that HTS would retain the telecast rights to the team.

And there's the rub. Sources close to the situation say that the Orioles' deal with Fox/TCI is structured in such a way that HTS cannot precisely match the terms, such as a reported provision that gives team owner Peter Angelos an ownership share in the proposed channel.

Westinghouse reportedly is attempting to counter the Orioles' deal in other ways, using, for example, its recent Infinity purchase and the six stations it owns in Baltimore and Washington to entice the club to leave WBAL (1090 AM) when the radio deal expires at season's end.

Westinghouse has tried to sell the Orioles on keeping the over-the-air games on its own Channel 13. The implicit message there is that if Fox/TCI gets the cable rights, Channel 13 would not carry broadcast games, thus reducing the Orioles to two lesser choices, channels 45 and 54, which aren't available on the Eastern Shore.

HTS' contracts with the Bullets and Capitals apparently give it stronger opportunities to match, and if the Bethesda-based channel is able to keep the two Washington teams, the two conglomerates then would appear to be at loggerheads, forcing them to compromise, perhaps merging their products into one channel; operate two separate and competing channels; or meet in court.

Compromise may not be in the cards, since a likely element in any HTS lawsuit is a presumption that TCI, which has a 20 percent stake in HTS, may have used inside information about the contracts to formulate a bid that Westinghouse officials couldn't match.

What happens if there are two channels? In New York, the Madison Square Garden network carries the Yankees, Knicks and Rangers, and SportsChannel airs the Mets, Nets and Islanders. Comcast owns the 76ers and Flyers in Philadelphia, and will create a channel to carry their games next year, but the current Prism/SportsChannel, which carries the two winter teams and the Phillies, has not indicated that it will go away, so there is precedent for head-to-head regional channels.

There may be precedent, but there isn't much channel capacity on many existing area systems, meaning that many of them will have to decide which channel to take: HTS, which has a 12-year history of proven service, or Fox/TCI, the newcomer with an array of local and national programming.

HTS is promoting its Capitals coverage and listing games in its October schedules. Is that a shrewd move or whistling past the graveyard?

Will I have to pay more? That's an easy one.

If you consider that the $23 million that Fox/TCI has offered to the three teams is about double what HTS is paying the Orioles, Bullets and Capitals, then you have to figure that the winner will pass on its higher fee to you.

Reportedly, the proposed Fox/TCI subscriber fee -- the biggest bulk of a channel's revenue -- is substantially higher than the one HTS is receiving, but if Fox/TCI is the winner, the Orioles' ratings alone would make such a channel so popular that systems would have to carry it.

Who's going to win? The obvious prediction is Angelos, Bullets and Capitals owner Abe Pollin, and the lawyers.

Pub Date: 9/26/96

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