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Monday, March 22, 2004
Cable dispute means most fans can't watch games

Associated Press

MINNEAPOLIS -- It's two weeks from the season opener and it appears that most of the Minnesota Twins fans in the Twin Cities won't be able to stay home this season and watch their team play more than 100 games on television.

The 105 games scheduled for cable and satellite broadcast won't be available to most Twin Cities residents because Twins-owned Victory Sports One Network, which owns rights to the team's games, has failed to secure deals with any of the major operators.

"We are not going to sit here and tell you that this is unexpected," said Jim Pohlad, son of team owner Carl Pohlad. "This is how these things go. We understood that at the beginning. Just that it's not going to be pleasant."

So far, it hasn't been. Victory is not on the two largest cable systems in the metropolitan area -- Comcast, which has 340,000 subscribers, and Time Warner, which has 210,000 -- or on the biggest system outside the metro -- Charter, which has 270,000 subscribers. Agreements also haven't been reached with Mediacom, which has 100,000 subscribers, and two satellite providers, DirecTV and Dish Network.

The only certainty for subscribers to these services is that they will be able to watch the 27 regular-season games on KSTC-TV in the Twin Cities along with any national telecasts on the Fox and ESPN networks.

Victory President Kevin Cattoor has had conversations with all sides, but about the only thing that appears to be heating up is fans' anxiety.

"If the Twins aren't on, I'm not going to be happy," said Tom Swanson, coach of a traveling baseball team in Maple Grove and a frequent Twins viewer. "I hold the Pohlads responsible. They are asking too much money."

Cable operators agree, saying they won't pay Victory's per-subscriber asking price of $2.20 to $2.30. They say that's too much for a cable outlet with such limited programming. And, in fact, they propose putting the Twins telecast on a digital tier where viewers would have to choose to buy Victory's programming. Otherwise, they argue, rates will have to be raised.

The Twins and Victory, on the other hand, say the games need to be attached to the expanded basic service, as was the case with the team's previous partner, Fox Sports Net (FSN) North.

Putting Twins games on digital cable, Cattoor said, will cost from $5 to $8 per household and send the team's viewership "down the tank."

"There won't be (a) substantial enough audience to really support the business," he said.

Victory, launched in October, took over the Twins' rights after last season, when the team's contract with FSN expired. FSN is part of the expanded basic package on all the major operators and is in 1.8 million homes in Minnesota, the Dakotas and northern Iowa.

But the Twins, pointing to what they considered a less than fair market income of about $6 million a year from FSN, decided to start their own regional sports network in an attempt to increase revenues.

"We are trying to build value -- provide additional funds to be able to make a more competitive team and build value in the franchise," Jim Pohlad said.

So far, Victory has 30 cable deals serving more than 200 communities. It is in about 100,000 homes in the Upper Midwest, Cattoor said.

"The companies not doing the deals are those that are nationally owned," he said. "When the decision is local, it has been to put Victory Sports on because they recognize the value of Twins baseball and understand the need to serve the customers."

The common response from cable operators is that the Twins are trying to fix something that wasn't broke -- at least from their perspective. "Mr. Pohlad and Victory took these games off Fox," said John Gibbs, vice president of government and regulatory affairs for Comcast. "Last year's model worked."

Among their contentions:

  • FSN charged operators about $1.70 per subscriber for programming when it still had the Twins, not to mention the Timberwolves, Wild and Gophers hockey.

  • The Twins recently received a multiyear offer from Fox that was worth about $12 million a season but didn't even look at it, because, Cattoor said, Victory was "moving ahead." (Full distribution of Victory would mean a much higher figure, on the basis of the per-subscriber fee and ad revenues.)

  • The Victory programming is nice; but, with the exception of a package of Gophers men's basketball games, the providers don't put much stock in Victory's high school or college product, and they certainly aren't excited about carrying several hours of ESPN News each day.

    There's disagreement about who's to blame for the stalemate. Cattoor says, "Essentially, we have had no response from other major cable operators and satellite providers since our initial offer 13 months ago."

    Said Bill Wright, area vice president of Comcast: "They first made contact with this very same offer last February or March. ... (Since then) there has been no movement."

    Added Bill Jensen, regional vice president of Mediacom: "Victory Sports continues to say publicly that Mediacom and other cable operators refuse to negotiate in good faith and aren't returning calls. But what is there to negotiate when Victory Sports starts out previous negotiations with, 'The rate is $2.20 per subscriber; we want to be on an expanded basic tier just like Fox Sports Net and ESPN, and we don't want to be on an optional sports tier'?"