NASCAR PIVOTAL IN TNT SOUGHT RATE INCREASE

[ 10/31/2002 ]

BY TEAM FORD RACING CORRESPONDENT

Charlotte, N.C. — TNT hopes to be successful using the NASCAR Nation in its quest to increase 2003 rates from cable operators.

Earlier this year TNT approached its cable distributors with a 10 percent increase pricing proposal. The network, which has grown by leaps and bounds during the past several years, cited increasing costs associated with NASCAR and NBA programming.

To overcome the hurdle of existing contracts, many scheduled to expire at the end of 2003, TNT has come up with a new product — TNT Plus, which will carry the entire catalog of NASCAR and NBA programming and the pricing increase. Operators not selecting the new program suite will not receive NASCAR programming.

"I did not promise anyone that I would be delivering basketball on TNT after the expiration of the [NBA] contract [last season],” said Turner’s president of domestic distribution, Andy Heller. “I didn't promise anyone NASCAR, because I hadn't bought it yet.

"To the extent that I have an obligation to provide TNT, I'm going to do it. If it becomes necessary to have two different networks, I'll have two different networks."

Heller’s requested increase represents about $.07 per household in the first year, on the current 70-cent level.

"I don't think they have a winning or legal argument," one network executive told MultiChannel News. "But even if they did, the MSOs [multi-system operators] would have to fight them tooth and nail because if they let them win on this, it's a green light for all of us who have hit shows or expensive programming on our channels and deals that go out more than a year."

MSOs, including Time Warner, Charter and Comcast, are not accustomed to increases requests prior to a contracts term completion.

"Usually, we get pitched [new rates] at the end of the contract, so TNT's move is highly unusual," National Cable TV Cooperative Inc’s Senior Vice President of Programming, Frank Hughes told MultiChannel News. NCTC represents some 12 million cable viewers across the country and is comprised of many smaller cable operators.

The lines have clearly been drawn between the parties reagarding TNT Plus with operators fearing TNTs successful increase request does nothing to stop other cable networks from trying the same approach.

The stakes are high for TNT, too; and if the TNT Plus plan isn’t successful the network could loose millions of NASCAR and NBA viewers. TNT, which has 86 million subscribers for its product, could loose 25 million households if AT&T, Comcast and Cablevision hold their stance not pay an increase for TNT Plus.

Of course, TNT’s ad rates would plummet if they lost nearly a third of their current installed base.

NASCAR Vice President of Programming, Paul Brooks, told Motorsportstv.com, "Turner has informed NASCAR that they are going through their normal cycle of negotiations with cable affiliates and they feel confident that these negotiations will result in renewed agreements and that NASCAR programming will not be affected. We look forward to giving NASCAR fans even more NASCAR programming in 2003."