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Comcast reaches deal to keep sports events on free TV

With a Monday deadline looming at the Federal Communications Commission, Comcast Corp. has reached an agreement with independent NBC TV stations to keep the Kentucky Derby, Sunday Night Football, the Stanley Cup Finals, and other marquee sporting events on free over-the-air TV, officials with NBC stations and Comcast say.

With a Monday deadline looming at the Federal Communications Commission, Comcast Corp. has reached an agreement with independent NBC TV stations to keep the Kentucky Derby, Sunday Night Football, the Stanley Cup Finals, and other marquee sporting events on free over-the-air TV, officials with NBC stations and Comcast say.

The deal sidelines some potential political opposition to Comcast's $30 billion deal for control of NBC Universal Inc. and settles a big issue for 210 independent NBC affiliates.

The NBC stations feared the cable giant would move blockbuster sports to Comcast's pay-to-watch sports channel Versus to challenge ESPN.

A wholesale migration of NBC sports content to cable TV would be a blow to the over-the-air NBC brand. NBC Sports is one of the crown jewels in NBC Universal, mostly because of its Olympics coverage. Other NBC Sports properties include Wimbledon, the PGA tour, the Ryder Cup, the U.S. Open tennis championship, and the Preakness.

Michael Fiorile, previous chairman of the NBC Affiliate Board, said Thursday that the NBC Sports package "will not change substantially" on over-the-air stations after a merger, although Comcast could broadcast some parts of competitions or individual events on "one of their pay channels."

The agreement keeps sports on over-the-air NBC TV for the "foreseeable future," said Fiorile, the chief executive officer of the Dispatch Broadcast Group.

"That's not to say," he said, "that in 20 years, if all sports has migrated, that they won't do the same thing."

Even though public-interest groups say Comcast should sell the 10 NBC over-the-air TV stations that it would own after a merger, which would include NBC10 in Philadelphia, the independent NBC stations would like Comcast to retain ownership of them, Fiorile said.

"We want them in the over-the-air business so they have skin in the game," he said.

The sports agreement between the NBC stations and Comcast comes as the public-comment period at the FCC over the merger ends Monday.

The FCC denied a request from financial-research and media giant Bloomberg L.P. to extend the comment period to early August, and many industry observers expect a flurry of filings.

Opponents, which include other pay-TV operators, the Communication Workers of America, and public-interest groups, say Comcast would gain excessive market power through its control of the nation's largest cable TV network and one of the nation's largest entertainment companies, NBC Universal.

A letter expected to be filed Monday with the FCC and signed by Bloomberg, the CWA, and others says that Comcast-NBCU "will, to an unprecedented degree, have the means and incentives to drive up the costs of cable and satellite TV service for consumers, and undermine competition between video distributors." A copy was made available to The Inquirer on Friday.

Comcast has said the merger itself should have no effect on cable prices.

David L. Cohen, executive vice president of Comcast, said Thursday that the cable company was comfortable with the pace of the review in Washington and pleased with the show of support for the Comcast-NBCU deal, which was announced in December.

Mayor Nutter was among the latest Pennsylvania officials to come out in favor, saying in a Wednesday letter to the FCC: "Here in Philadelphia, we support our own."

Nutter said in the letter that Comcast "shares our unrelenting drive to ensure Philadelphia is on top of its economic game for the future."

In May, most of the Pennsylvania delegation in Washington signed a letter sponsored by Rep. Bob Brady (D., Phila.) that was written in part by a Comcast lobbyist in Washington.

While Pennsylvania lawmakers stress the economic-development benefits of the deal, critics view the economic power of the merged entity as a threat to competition.

Comcast said Friday that more than 400 letters of support for the merger have been filed with the FCC.

The American Cable Association, a group of about 900 cable companies, most with fewer than 5,000 subscribers, says Comcast-NBCU could bundle Comcast-controlled local sports with NBC's entertainment and news into a "must-have" programming package and charge premium prices.

Pay-TV operators would have to buy and distribute the programming, leading to higher costs for subscribers. The markets where Comcast-NBCU would have the most economic power are those with Comcast regional sports networks and NBC TV affiliates owned by NBC Universal, they say. Philadelphia is one of those markets.

"The threat is that all cable operators - not just small cable operators - will pay higher prices for all the programming that either of these two entities sell separately," said William Rogerson, an economics professor at Northwestern University and former FCC chief economist.

Rogerson said he would have the same concerns if NBC Universal had said it would buy Comcast's regional sports networks because of the depth of programming the deal would give the merged company in local markets.

Telling Comcast to sell its regional sports networks in those major metropolitan markets as a condition of the merger would be unrealistic, Rogerson said. But the FCC could enact an arbitration procedure to level the playing field between Comcast-NBCU and competitors when they cannot agree on distribution prices, Rogerson said.

Cohen, the cable executive, called the idea that Comcast would gain excessive economic power in the programming business "an academically and factually flawed argument." He said that after a merger, Comcast would control only 9 percent to 12 percent of the nation's programming market.