Comcast And YES Network Play Hardball As Baseball Season Approaches

YES Network

The benches haven’t cleared yet. But there’s a lot of yelling from the dugouts at the Fox-controlled YES Network, which carries the New York Yankees, and Comcast a little more than three weeks before the baseball season begins.

YES has been dark on Comcast since November 18. They aren’t in serious talks to change that.

And Fox just began to blanket the area around New York with ads urging about 900,000 Comcast customers — mostly in New Jersey, Connecticut, and parts of Pennsylvania — to switch to providers who “treat them like a valued customer.”

Comcast says it’s unmoved: YES is “demanding more than a 30% [price] increase for a network that has very low viewership among our customers and which is already the most expensive [regional sports network] in the country…It remains our hope to bring back YES to our customers. But, we can only do that if Fox becomes realistic with its price demands.”

Fox fires back that Comcast “is misleading consumers with a series of claims that are simply not true….YES Network is the most-watched regional sports network in America, and we have the Nielsen ratings to prove it.”

The dispute is mainly about price: Cable and satellite companies pay an average of $5.36 a month for each household that receives YES, research firm SNL Kagan estimates.

YES’ carriage agreement with Comcast expired at the end of January 2015 — less than a year after Fox raised its ownership stake in YES to 80% from 49%.

Comcast agreed to pay a higher rate, although it wasn’t part of a formal deal. Remember that, at that point, it hoped to buy Time Warner Cable — which is a major distributor around New York, including Manhattan.

Comcast’s interest YES cooled in April 2015 when the cable power withdrew its TWC bid. It backed down after federal officials indicated that they wanted to block the union.

Like other pay TV distributors, Comcast also is eager to slow the increase in its programming costs and, by extension, the rates customers pay. The company’s programming outlays increased 7% last year to $10.5 billion.

In addition to the price dispute, Comcast objects to YES’ effort to change a so-called Most Favored Nations agreement that ensures the cable company pays the lowest price.  In the previous deal, YES would drop Comcast’s rate if the sports network gave someone else a better one.

Fox now wants to link that guarantee to one that might require Comcast to expand its distribution of other services including Fox Business Network and FS1, the cable company says.

“This is the first cable network we have dropped,” Comcast says. But “we are not the only distributor who has refused to agree to pay YES’ exorbitant fees. For example, Dish also does not carry YES.”

That’s a “smokescreen,” Fox says. “Dish never carried YES” but just about every other major distributor in the region does — including DirecTV, Verizon FiOS, Frontier, Cablevision, and TWC.

Fox also scoffs at Comcast’s opposition to rising costs for sports networks: The cable company also owns eight, including New York’s SNY which offers the New York Mets. “Comcast agreed to the YES rate and paid it during the entire 2015 Yankees season,” it says adding that some of Comcast’s sports networks “charge higher rates than YES while getting far fewer viewers.”

Instead of trying to slow slow the increase in subscriber rates, Fox says “this is all about Comcast increasing its profits.” The cable company “raised its overall rates by 4% after it unilaterally took its most popular regional sports network, the YES Network, off the dial.”

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