Major League Baseball will allow the In Demand cable provider and the Dish Network satellite service a chance to match an agreed-upon deal with DirecTV to sell MLB's Extra Innings package, temporarily quelling fears that thousands of fans would barred from receiving out-of-market games.
MLB Executive Vice President Tim Brosnan said In Demand and Dish have until March 31 to accept a deal that allows them Extra Innings so long as they place the MLB Channel, which expects a 2009 launch, on the same basic subscription tier as DirecTV agreed to in its contract.
"The incentive to them is so they can participate and so their fans can obtain the product," Brosnan said. "There certainly was an incentive for DirecTV, and we can assume the incentive is the same for the cable company."
While Brosnan would not detail other specifics of the deal, the placement of baseball-only channels on basic tiers could serve as a poison pill that prevents In Demand and Dish from signing on. In Demand president Robert Jacobson told the Associated Press that the agreement between MLB and DirecTV was a "de facto exclusive deal."
When placed on basic tiers, channels can charge far higher rates for advertisements because the number of subscribers is significantly greater.
Should MLB and Dish Network or In Demand – which would distribute Extra Innings to Time Warner, Cox and Comcast cable operators – not reach a deal, there is a seven-year, $700 million contract in place for Extra Innings to exclusively run on DirecTV.
"We got to an arrangement that works for us on either front," said Chase Carey, DirecTV's president and CEO. "If you're asking which I'd prefer, I'd say the exclusive. That would be the preferred path."
The uproar over an exclusive deal enraged fans across the country and prompted Sen. John Kerry (D-Mass.) to write a letter asking the Federal Communications Commission to investigate.
"This should help enormously in that area," commissioner Bud Selig said.
Extra Innings allows subscribers to watch broadcasts of most MLB games for a flat rate each year. Because of blackout restrictions, however, some cities without major-league teams are barred from viewing up to six games each night.
Selig said at the All-Star Game last season he would look into changing the blackout rules. An MLB spokesman recently said there has been little progress in the matter.