Comcast to buy HTS sports channel

Giant cable firm to buy control of station from Viacom

July 12, 2000|By Mark Guidera | Mark Guidera,SUN STAFF

Comcast Corp., the dominant cable television provider in the Baltimore-Washington area, extended its reach yesterday by agreeing to buy a majority interest in cable channel Home Team Sports from programming giant Viacom Inc.

The deal comes on the heels of a Comcast sports venture's purchase in June of three minor-league baseball teams in Maryland.

Publicly held Comcast, the nation's third-largest cable company, with 8.2 million customers, declined to disclose terms of the HTS deal, but an executive who asked not to be identified said its value was about $150 million.

Little if any money would trade hands. The executive said Comcast would provide air time for existing and new Viacom cable channels in exchange for HTS.

Comcast would get a two-thirds ownership stake in Home Team Sports LP, which has 4.7 million viewers in the Baltimore-Washington area.

HTS is best known for broadcasting Baltimore Orioles baseball, Washington Capitals hockey and Washington Wizards basketball. HTS also broadcasts programs such as fishing shows and local women's sports.

Comcast and HTS officials said no definitive plans for changing programming - or the name - of the Bethesda-based channel have been made. But they hinted that Comcast would take advantage of its position as an owner of sports teams.

"This is really a perfect marriage for Comcast and HTS," said Comcast spokesman David Nevins. "It's a good strategic business fit. We see a lot of cross-marketing opportunities, and we plan to use our muscle to improve what we think is already the premier local sports network in the country."

HTS would move its headquarters to Silver Spring, where Comcast is establishing a regional headquarters.

As part of the deal, Comcast would acquire 100 percent of Midwest Sports Channel and Midwest Sports Channel Wisconsin. The regional sports programming networks serve 2.6 million viewers in the Minneapolis and Milwaukee areas. Fox Cable Networks Group would retain a one-third stake in HTS. Viacom, owner of MTV, TNN and VH-1, said it wanted to sell the channels because it is not interested in specializing in local sports programming.

Anna-Maria Kovacs, a cable TV industry analyst with Janney Montgomery Scott LLC in Boston, said the deal is another move by Comcast to build up revenue-generating properties in the mid-Atlantic region.

The HTS deal is expected to close in January, coinciding with Comcast's scheduled takeover of the cable franchises in Baltimore and Washington as part of a government-mandated swap required to clear AT&T Broadband's purchase of Tele-Communications Inc., which forms the nation's No. 1 cable TV company.

That move will boost Comcast's current 2 million subscribers in the area to 3.5 million.

Comcast, which has been branching into high-speed Internet services, also operates cable systems in Baltimore County, Harford, Howard, Anne Arundel and three Southern Maryland counties, as well as in Virginia. The company employs about 3,000 workers in the region.

Kovacs said the HTS and MCS purchases would likely be used by Comcast to help it compete for viewers with AT&T Broadband, satellite television and others in the ferociously competitive home entertainment arena.

"It's programming that's going to appeal to a particular market," said Kovacs. "It gives them something special to offer subscribers."

Comcast, she said, has targeted sports and its wildly popular - and profitable - home shopping network, QVC, as ways to build revenue, $1.8 billion in the first quarter of this year.

Alan Gould, an analyst with Gerard Klauer Mattison & Co., said: "Most people want to see how their sports teams are doing. It becomes a cable exclusive, which becomes a competitive advantage."

One marketing opportunity could come from the purchase last month by Comcast-Spectator, Comcast's sports venture, of three minor-league Orioles affiliates in Maryland: the Double-A Bowie Baysox, the Single-A Frederick Keys and the Single-A Delmarva Shorebirds in Salisbury.

Nevins said Comcast executives had made no decisions on programming changes at HTS, but that broadcasting those teams' games would likely be explored.

Said Brian L. Roberts, Comcast's president: "We are firm believers in the branding and marketing opportunities that sports programming offers us in key markets."

Comcast owns stakes in several sports channels, including the Golf Channel, Outdoor Life, and Speedway. Nevins said the company is attempting to model its business plans for the Baltimore-Washington market on its success in its hometown of Philadelphia, where it operates cable franchises in and around the city and in suburban New Jersey. It also owns SportsNet, a local sports network similar to HTS in the Philadelphia-New Jersey area.

Comcast, through its majority stake in Comcast-Spectator, owns, among other things, the Philadelphia Flyers professional hockey team and the Philadelphia 76ers basketball team.

In that market, Comcast broadcasts Flyers and 76ers home games on SportsNet.

Nevins said Comcast plans to explore ways to use HTS as a way of increasing Comcast's dominance in the Baltimore-Washington area, as well as in Virginia and northern North Carolina where there is a growing subscriber base but no professional sports teams.

Comcast stock closed yesterday at $35.625, down 18.75 cents.

Bloomberg News contributed to this article.

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