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Greg Wyshynski

Beyond the wicked hyperbole of the Versus, DirecTV dispute

Greg Wyshynski
Puck Daddy

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On XM this morning, NHL deputy commissioner Bill Daly was asked about the dispute between Versus and DirecTV that's knocked the Comcast-owned network off the satellite service due to a contract squabble.

"We have the luxury of some time for the parties to work this out ... Our interest is protecting the interests of hockey fans. We have good business relationships and partnership relationships with both DirecTV and Versus, and we'll be as helpful as we can in the process."

So despite some obvious jitters and outright panic amongst hockey fans -- Puck Buddy Jeff B., a Pittsburgh Penguins fan in Connecticut, emailed us about potentially missing Stanley Cup finals games due to the dispute -- the NHL isn't stepping into this minefield until it needs to at the end of September. Even if we all know where their loyalties are; it's not exactly DirecTV who owns the Philadelphia Flyers ...

While the NHL's on the bench right now, there have been some intriguing developments on this story since it broke, including clarification on what the two sides are actually arguing. From Robert Seidman of TV By The Numbers:

DirecTV initially said it was about price, that Comcast was seeking a 20% hike in licensing fees for Versus. Additionally DirecTV has said it is paying more for the service than other providers. But Comcast says that isn't so and that the issue is that DirecTV wanted to move the package into some digital sports tier ghetto on DirecTV where Versus would've been available to six million fewer DirecTV subscribers.

Previously Versus was available to subscribers of the Total Choice Xtra package, where it was available to around 14 million on DirecTV who subscribe to that package at no additional cost.

But what's really at the heart of this fight?

We asked Jade Ekstedt, spokesperson for DirecTV, if this was about carriage more than cost; the response:

"DIRECTV already pays Versus more than any other independent distributor (ie non-Comcast) and now they're demanding a more than 20 percent hike. Comcast allows other distributors to carry Versus at much lower level of distribution than they are asking of DIRECTV, most notably DISH Network. DIRECTV expects equal treatment. Specifically, we've asked for packaging rights similar to other distributors like DISH, which we believe is the appropriate way to gauge the market."

Multichannel News writes that DISH Network carries Versus in the "AT250 tier and has about a 35 percent penetration rate," and DirecTV has indicated it's looking for a similar deal. Before being taken off the air, Versus had access to about 80 percent of DirecTV's subscribers.

Is the DISH Network comparison a fair one? Keep in mind that Comcast struck that deal with DISH back in the OLN days; way before the name change, the increase in properties and ratings growth. Also keep in mind that Versus has clearance above 70 percent on nearly every major cable provider, from Time Warner to (naturally) Comcast.

(DISH, for the record, is using this dispute to its advantage, offering Versus to its entire subscriber base for the next three months. Sneaky buggers.)

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DirecTV is tempering its tone in the PR battle after coming out the gate with embarrassing, unprofessional bluster; such as the claim that Versus is "basically a paid programming and infomercial channel with occasional sporting events of interest."

The satellite provider sent over a letter to Puck Daddy after we covered the dispute earlier in the week, which can be found here. (Just change "DirecTV Customer" to "Hockey Fan" ... they did.) It's tone is more conducive to negotiation, even with some tough talk. Derek Chang, Executive Vice President for Content Strategy and Development, writes:

"We have successfully negotiated hundreds of carriage deals, but sometimes you need to stand up to a bully and there is a strong possibility that if Comcast makes these same demands to other distributors, they will also be forced to drop Versus resulting in significantly reduced exposure and availability of the sports you like to watch on Versus. Maybe that's what Comcast wants; other than greed it's the only other explanation."

But is it greed? Versus has grown as a network to the point of familiarity and clearance on most cable networks, and continues to grow. The notion that it would be relegated to niche status doesn't sync up with its reputation, such as it is.

That growth, however, is also a negative factor in this dispute. Watch Kalib Run, an MMA blog on SB Nation, sees this as a part of a larger picture in which Versus is attempting to build a sports brand to rival that of ESPN; and it needs the viewers to do that:

Clearly Comcast wasn't willing to compromise but losing audience is a serious step backwards. If Comcast's goal is to build a true sports network they are going to have to figure out a compromise or risk the Versus brand being branded as niche and not meaningful to the general sports viewing public. So if Comcast is really hoping to build a legit sports network they'll have this worked out, but if they've decided that its not worth it then we might see a long impasse.

Again: It's not just a hockey issue. It's college football, MMA, even those dudes who watch the fishing shows (and you, the Sports Soup viewer, whoever you are). There's too much pressure from too many parties for this not to be resolved before the NHL needs to step in.

Because if it needs to ... well, get ready for another round of "NHL is hitched to the wrong TV wagon" jabs.

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