DBS Pitches Sports Programmers

By | June 16, 2003 | Feature

CHICAGO–Direct broadcast satellite (DBS) service providers are looking to add sports programming to their lineups in an effort to entice subscribers away from cable TV.

Both Hughes Electronics’ [NYSE: GMH] DirecTV and EchoStar Communications [Nasdaq: DISH] recently added new sports channels to their slate of existing programming and the trend could continue as additional satellites are built and launched to boost channel capacity. With the rising cost of sports programming from heavy hitters ESPN and others, alternative sports networks are giving multi-channel service providers a relatively low-cost way to serve the interests of sports fans without paying huge rights fees to offer content.

EchoStar last week began broadcasting the all-soccer Spanish language channel, GOL TV, in English, moving it to the DISH network’s “Top 150” programming lineup.

In April, DirecTV added to its fold the fledgling National College Sports Television network and has expressed interest in signing deals for additional alternative sports programming.

Satellite TV service providers want to cater to the interests of people who are passionate enough about their favorite sport or hobby to pay for subscription-based programming. The strategy of introducing modestly priced sports programming appears to be succeeding.

Roger Huguet, COO of Miami-based GOL TV, told SATELLITE NEWS during an interview at the National Cable & Telecommunications Association (NCTA) conference here last week that his company saved costs by obtaining the rights to broadcast games from Italy, Uruguay, Peru, Bolivia, Ecuador, El Salvador and other countries where the fees to broadcast soccer games are not exorbitant.

The growing interest in soccer in the United States is shown by the estimated 90,000 local games played in the country each weekend, Huguet said. GOL TV is making plans to introduce an HDTV channel by next year, he added.

EchoStar beat rival DirecTV to the punch by signing GOL TV to an exclusive programming contract. DirecTV had pioneered locking up exclusive sports channel agreements with its high-cost pact to provide NFL Sunday Ticket.

GOL TV’s key selling points are low-cost programming rights, connections within the soccer world and in-house production capabilities, Huguet said. Tenfield, a soccer- management agency in Latin America, owns the network.

Three former soccer stars from Latin America are members of the company’s board of directors. They are: Francisco Casal, GOL TV chairman and CEO, Enzo Francescoli and Nelson Gutierrez, who are vice-chairmen.

GOL TV’s business model calls for 60 percent of its revenues to come from subscription fees and 40 percent from advertising, Huguet said. The network recently signed up a group of small cable companies to offer its content and now is close to inking distribution contracts with two large cable operators, he added.

Still in its startup phase, GOL TV has two years worth of financing in its pocket and expects to reach break-even in 2005.

College Spirit

Not to be outdone, DirecTV signed up the National College Sports Television network.

The network was founded by Stephen Greenberg and Brian Bedol, who were later joined by Chris Bevilacqua, a former senior executive with Nike. Greenberg, the son of the late Detroit Tigers baseball great Hank Greenberg, said the company has a range of quality college sports to offer viewers.

The National College Sports Television network has arranged to offer Division 1AA football involving smaller colleges. The new channel was launched on DirecTV April 7. It also is available on a number of small cable TV companies, Greenberg said. “We will be announcing large carriage deals in the next several weeks,” he added. He declined to elaborate.

The goal for the College Sports Television network is to build the value of its assets to become a “win, win, win” proposition for distributors, viewers and investors, said Greenberg, who also is a managing director at Allen & Co., one of the major financial supporters of the network. Other financial investors in the startup sports channel are Chilton Investment Group and Constellation Ventures.

Perhaps not all channels offering college sports are a hot ticket with satellite TV providers.

The Major Broadcasting Cable (MBC) Network, which has exclusive rights to broadcast football games from black colleges and universities, has been unable to convince the two satellite TV powerhouses that its programming is worth carrying.

While the four-year-old network attracted attention here last week when Michael Jackson appeared at the company’s booth, it has failed to entice DirecTV or EchoStar.

Marlon Jackson, Michael’s brother and a co-owner of the channel, said his network is aimed at offering positive programming for the African-American community. In addition to Marlon Jackson, other owners of the network include boxing champion Evander Holyfield and former baseball player Cecil Fielder.

MBC’s best chance for carriage on one of the satellite TV services could rest with sports-savvy DirecTV, since the channel has a substantial amount of sports programming and appears interested in adding to it.

The financial value of broadcasting the football games of black colleges and universities is not insignificant, MBC officials said. Those games could offer a nice advertising opportunity for business, the officials said.

–Paul Dykewicz

(Roger Huguet, GOL TV, 305/864-9799; Stephen Greenberg, College Sports Television; 212-342-8700; Jamie Carlington, MBC, 404/350-2509)

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