Customers won't see TV rebates for short hockey season

Posted: May 10, 2013

Television distributors are being financially compensated for missed NHL games in this season shortened by labor problems, but hockey fans and other pay-TV subscribers won't see any of it.

Neither the NHL nor TV distributors disclosed the financials in what the parties are describing as rebates, citing confidentiality agreements. A Comcast Corp. executive disclosed the existence of the rebates in a conference call with Wall Street analysts last week.

Comcast and Verizon Communications Inc., which operates the FiOS service, will follow industry practice and not pass those rebates on to subscribers, say officials with both companies.

Comcast said that cable channels continued to deliver programming even though it was substituting for the canceled NHL games.

Comcast spokesman John Demming said Wednesday, "Our goal is always to provide customers with the content they love. During the NHL lockout, we continued to provide customers with sports programming on TV and across multiple platforms."

NHL spokesman Frank Brown said Tuesday, "We will not divulge the figures or the details."

The NHL canceled 510 regular-season games, or 41 percent of its schedule, when league owners and players could not agree on how to divide revenue in contract talks.

At the time of the lockout, league and network officials said an additional year of TV rights could be added to an NHL contract if a full season had to be canceled. The owners and players reached an agreement before that action had to be taken, leading to the shortened season and far fewer televised games.

Comcast executives Neil Smit and Michael Angelakis spoke of sports costs in their recent call with analysts.

Angelakis, Comcast's chief financial officer and vice chairman, said Comcast's programming costs - which are expected to increase in the low double digits this year - rose only 8.5 percent in the first quarter, partly because of "lower sports programming costs."

Smit, the cable division president, said later in the call, "Programming expense growth we still expect in the low double digits for 2013. We had a few exceptions in the first quarter, one of which was the NHL lockout, which resulted in a rebate, a one-time rebate."

TV subscribers finance sports through their cable- or satellite-TV bills. While they don't pay directly for the sports channels, they pay for the programming as part of the overall bundle of entertainment, news, and sports distributed through Comcast, DirecTV, Verizon, and others.

Live sports is TV's priciest entertainment and Comcast-owned NBC has agreed to a long-term deal to pay an estimated $200 million a year for rights to televise NHL games.

NHL franchises also have TV rights contracts with regional sports networks. The rebate mechanism is contained in the confidential affiliate agreements between the sports networks and TV distributors, including DirecTV.

Verizon spokesman Lee Gierczynski said, "Verizon does not share specifics of our confidential content agreements, and in cases like this, the company follows others in the industry in not providing rebates."


Contact Bob Fernandez at 215-854-5897 or bob.fernandez@phillynews.com or follow on Twitter @bobfernandez1.

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