It’s not just athletes who compete. With billions of dollars at stake, the licensing wars between cable companies and sports leagues and organizations over sports programming can create conditions ripe for conflict, said Time Warner executive Melinda Witmer, L’87.
Witmer, recognized as one of the 10 most influential women in cable, is married to Bill Koenig, L’87, a top executive at the NBA. She negotiates sports contracts; he licenses NBA rights. So it was only a matter of time until their worlds collided. During the Dean’s Speakers Series last March, the power couple of sports programming explained that although they often find themselves on opposite sides of the negotiating table regarding licensing content, broader concerns like government regulation unite them from time to time.
Witmer expressed concern over new licensing deals in which games traditionally broadcast on major networks are migrated, in some cases, onto cable networks owned by sports franchises. Carrying these new networks on the terms they have demanded makes it difficult to manage costs, said Witmer, who is executive vice president and head of programming for the second largest cable operator in the United States.
The NFL Network, for example, has insisted that cable companies add the channel to one of its widely distributed tiers and require that all subscribers receive and pay a monthly fee per subscriber.
To avoid raising costs for a wide swath of subscribers, cable companies want to offer the channel on a sports tier, for which avid fans who wish to subscribe to receive the network would pay an additional fee. Time Warner has yet to reach an agreement and as a result, sports fans have missed live games, said Witmer.
Koenig, executive vice president of business affairs and general counsel for NBA Entertainment, said the league’s network, NBA TV, was licensed without acrimony, and noted that leagues are beginning to look beyond the creation of domestic networks for future growth.
NBA telecasts are distributed in more than 200 countries. The broadcast of two games between Milwaukee and Houston this past season reportedly drew 400 million Chinese viewers, leading Koenig to call the potential and opportunity in international sports programming “dizzying.”
Although sport tiers are a touchy subject for the pair — a neighbor once witnessed them arguing over it as they walked their dog, and concluded that they were headed for divorce — they are united against intrusive government intervention.
Witmer criticized the FCC’s efforts to regulate how cable companies distribute content, by mandating “a la carte programming.” Under this rule, consumers would choose and only pay for individual channels they want to buy on a network-bynetwork basis, rather than receive them as part of the larger package of, say, 80 to 90 channels.
While the effort to cut costs to consumers is commendable, said Witmer, the underlying economics of cable networks rely heavily on broad distribution for fees and advertising. In an a la carte world, the consumer may pay nearly as much but receive a lot less.
Koenig agreed that a la carte programming would not be good for the NBA, either. He said it would prevent people from sampling games, a practice that wins the league new viewers.