Tennis Channel CEO Says ALJ Decision Could Spark Investment in Programming
Investors could be lured back to financing independent pay-TV programming following an FCC administrative law judge’s ruling that Comcast has discriminated against the Tennis Channel (CD Dec 21 p11), Tennis Channel CEO Ken Solomon told us last week. Today, “you can’t raise money for independent networks. It’s very, very hard,” he said. That’s an odd case for a business that’s so lucrative for the major media companies, he said. The health of cable programming networks is part of what lured Comcast to buy NBCUniversal and is frequently touted by media executives from Rupert Murdoch to Bob Iger, he said: “Isn’t it counter intuitive that that all this private equity money that knows how valuable it is, are not willing to invest,” he said. “It’s because it’s a closed market and the distributors are not allowing new players in."
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But that could change following the ALJ’s initial decision that Comcast discriminated against the Tennis Channel in favor of its own networks, Solomon said. “It does have the potential to really level the playing field” in terms of independent networks getting broad pay-TV distribution, he said. “Hopefully the happy result is that investment will return,” he said. “There is plenty of money there for good ideas for programming services, however they're distributed, assuming the gatekeepers treat them fairly.
That may not be true, HDNet Chairman Mark Cuban said in an email. “I have no idea what the PE community would do, but I would be surprised if this spurred any investment,” he said. He said HDNet has been following the Tennis Channel carriage complaint closely and that independent networks are at a disadvantage for several reasons, “From wholesale bundling to retrans fees to quid pro quo relationships between distributors,” he said. “HDNet will continue to use all means available to us to make sure we are treated fairly."
It could be some time before the ALJ’s order takes effect. Comcast has indicated it could appeal the decision to the full FCC and potentially to a federal appeals court (http://xrl.us/bmmrui). That process could take more than a year to play out and Comcast has the legal resources to see it through, said a cable industry attorney who has followed the case.
Meanwhile, Solomon said he expects to begin discussions with Comcast soon about wider distribution of the Tennis Channel. “I think it has to happen soon,” he said. “We're hopeful we can get this worked out so people can see the Australian Open,” which begins Jan. 10: “In any case, it requires a bit of a discussion and there are obviously many [Comcast-owned cable] systems that we're talking about.”