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DirecTV, Comcast fight over Versus distribution

The satellite TV broadcaster drops Comcast's sports network. Things have gotten ugly.

September 02, 2009|Joe Flint

Call it Goliath Versus Goliath.

Cable giant Comcast Corp. is locked in an ugly battle with satellite broadcaster DirecTV over the sports channel Versus. Unable to strike a new deal with Comcast, DirecTV on Tuesday dropped carriage of Versus to its 14 million subscribers.

Such disputes are usually resolved behind the scenes, but not in this case. After removing Versus from its lineup, DirecTV slapped a notice on the channel the network had occupied, announcing: "Comcast, which owns Versus, has forced us to take down the channel because we will not submit to their unfair and outrageous demands."

DirecTV alleges that Versus, which is best known for its Tour de France and National Hockey League coverage, is trying to gouge the distributor by seeking a "more than 20% rate hike." Neither side would talk specifics, but people familiar with the situation say Versus wants an increase from about 21 cents to 26 cents per subscriber per month.

Comcast counters that this isn't about money.

"DirecTV likes to cloud the facts," said Jamie Davis, president of Versus. Davis said DirecTV wanted to move Versus to a package that would let it reach only 6.3 million of the broadcaster's subscribers.

DirecTV does not deny that it wants to place Versus on a tier of service with less reach, but it says Comcast already has similar arrangements with other distributors. The satellite-TV provider, in a statement, called Comcast's position "piggish."

This feud is not an isolated incident. Comcast and DirecTV have had a particularly acrimonious relationship lately. The companies are involved in arbitration cases over carriage of regional sports networks owned by Comcast in Northern California and New England.

But such disputes are not limited to those two media behemoths. As the programming and distribution sides of the entertainment industry get more consolidated, such battles are becoming common. Over the last few years Dish Network has been involved in squabbles with both Lifetime and Nickelodeon.

This tiff is getting a lot of attention because Comcast is both a programmer and a distributor. It had a drawn-out fight with the National Football League because it didn't want to place the NFL Network on one of its most popular services. Comcast carried the network in a sports package that reached only 3 million homes; after a long dust-up, it moved the network to a package that reaches 11 million homes. Now it finds itself on the opposite side of the equation, with a distributor not wanting to carry one of its channels on one of its more popular platforms.

Versus, which was available in 75 million homes until DirecTV dropped it, is Comcast's attempt to become a player in the sports television business. It has been aggressively going after major sports over the last few years, trying to distance the channel from its past when it was known as the Outdoor Life Network and best known for fishing and hunting shows.

In addition to the Tour de France and the NHL, Versus has rights to college football, including Big 12 and Pac-10 games. Versus tried unsuccessfully to get an NFL package a few years ago and will probably be a bidder again when the deals are up in 2014.

Versus' cost pales in comparison with ESPN's. That network charges distributors almost $4 per subscriber but has a much more powerful lineup of sports, including professional football and baseball.


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