DIRECTV Uses HD to Win Support for MLB Deal

Many of you are likely aware that DIRECTV has an exclusive arrangement with the National Football League to broadcast out-of-market games through a package called NFL Sunday Ticket. This package generates billions of dollars for The League as well as innumerable subscribers for the satellite TV provider, since that's the only place hard-core football fans can go if they want the ability to watch every single game each Sunday. The cable industry and DISH Network understandably hate that deal, but it works out nicely for both the NFL and DIRECTV.

Now DIRECTV has its sights set on Major League Baseball. The satcaster is negotiating an exclusive deal with MLB that would generate about $700 million for baseball over seven years. In exchange, DIRECTV would own the exclusive rights to TV broadcasts of out-of-market games, effectively pulling that package from its current licensee In Demand and the cable companies that sell the season-long subscriptions. According to a variety of industry sources, the deal is all but signed, with DIRECTV also agreeing to guarantee carriage of MLB's new TV network that will hit the airwaves in 2009.

One argument that DIRECTV is making for why this deal is actually pro-consumer is that it will begin showing MLB games in high-def, like it does with most NFL Sunday Ticket games. For whatever reason, In Demand does not currently air any MLB games in HD. DIRECTV's primary case for being allowed an exclusive agreement for these games is that it will better utilize technology such as HD to enhance the fan experience.

To my knowledge this is not a deal that requires any kind of government regulatory approval. However, the issue has received a decent amount of media attention due to its opposition by one Senator John Kerry (D-Mass.). As an adamant Red Sox fan, the former presidential candidate and junior senator from the Bay State is apparently concerned that Red Sox fans around the country would be forced to dump their cable company for DIRECTV if they wanted to continue to watch their team's games. DIRECTV and MLB contend that the games will continue to be available online through MLB.TV, the league's live-game streaming video site.

It will be interesting to see whether Sen. Kerry can parlay his outrage with this deal into congressional hearings over the issue. Without any regulatory approval being necessary, I suppose the main argument against the deal may have something to do with anti-trust matters. However, the NFL Sunday Ticket has been exclusive to DIRECTV for years and seems to work well for everyone involved. My guess is that there will continue to be grumbling about the latest DIRECTV attempt to lock in a significant sports contract but it will ultimately sail through without too many problems.