The stalemate between Comcast and Altitude TV is nearing its 10th month with local Nuggets and Avalanche game broadcasts absent from the state’s largest cable provider. The following is an update with commonly asked questions about the carriage rights dispute.
Why did Comcast pull Altitude from its lineup?
A 15-year partnership between Altitude and Comcast expired because of a changing TV market as cord-cutting forced distributors to re-evaluate their business models. Kroenke-owned Altitude, which carries the Nuggets and Avalanche, doesn’t have the clout of other regional sports networks because of its independence. With Comcast’s deal expiring in Denver, it likely wanted to make an example of Altitude (which could be cited in further RSN negotiations). It’s a fair assumption to call it a leverage play.
Comcast also likely didn’t want to pay simultaneously for Altitude and AT&T SportsNet Rocky Mountain (home of the Rockies) as two RSNs covering essentially the same territory. Furthermore, AT&T-owned DirecTV carries several Comcast RSNs in its own regions, and Comcast carries four AT&T RSNs in its markets. It left Altitude vulnerable from a business standpoint.
Said one former RSN executive: “There’s no doubt they have less leverage than somebody like a FOX, or a Sinclair, or a Disney or whoever can hurt them on a variety of places, whereas Denver in regards to Altitude is kind of an isolated incident.”
What isn’t there a new contract?
Price and distribution models that are at odds. Comcast maintains not enough of its customers watch Altitude, and therefore, want to offer Altitude on an a-la-carte or tiered basis. Altitude contends it would be the first RSN in the country in such a format and that it would put them out of business.
Comcast made a November contract proposal, per a source familiar with negotiations, which cut Altitude’s previous fee by 50 percent. Altitude offered Comcast a contract with the same fee as before in Year 1, followed by minimal increases in subsequent years, according to a league source.
Comcast, which owns and operates its own RSNs, offers those channels on a basic package where the most customers can watch.
Why won’t Altitude provide an a-la-carte channel on Comcast?
In the 1980s, RSNs were on an a-la-carte model and dying because of it. Once team owners learned that putting their games on basic TV wouldn’t hurt attendance, they became more comfortable with the broadcasts being widely accessible.
Today, professional sports teams sell their TV rights to networks, which then sell their broadcasts to distributors. Teams calculate their rights fees from equivalent markets. Networks must then pay for the rights fees, production costs and employee salaries. In an a-la-carte system, networks are uncertain they would recoup the money for rights fees.
Comcast contends that not everyone who pays for its basic cable package likes sports, and those subscribers are forced to subsidize the difference. However, access to TV programming from any channel (including non-sports) on a basic package does not guarantee or require subscriber viewership.
Why is Altitude available on DirecTV but not Comcast or Dish?
Altitude reached a deal with DirecTV last Halloween that was similar financially to their prior agreement. The biggest change was that Altitude pitched 4K technology for game broadcasts. With Dish, there are questions regarding its interest in carrying regional sports networks moving forward.
Why is Altitude not available on a streaming service like Hulu?
Altitude offered it to Hulu but the economics don’t work for the streaming service.
Are Comcast subscribers with Altitude still being charged for it?
Sort of. Comcast announced in October the application of “partial credit to our customers’ Regional Network Fee” which covers the cost of Altitude and other channels on the same expanded basic package. The exact reduction depends on where the customer lives and the service area. However, subscribers in the Denver metro reported just a $1.25 monthly decrease.
Have fanbases in other states dealt with similar regional television disputes?
Yes. Dodgers games on SportsNet LA were absent from DirectTV between 2014-19. In New York, the YES Network went dark on Dish in July. NBC Sports Chicago is also currently blacked out on Dish.
How likely is a Comcast-Altitude agreement prior to the NHL/NBA season re-start?
Very unlikely, given the lack of productive talks since September. And the negotiation gap expanded back in November when Altitude filed a lawsuit against Comcast for violation of state and federal antitrust laws. The case is now in discovery (sharing evidence) with a joint status update due on July 16, according to online court records. Comcast has filed for a motion to dismiss the case.
What is the goal of Altitude’s lawsuit against Comcast?
The lawsuit claims that Comcast is negotiating with financial terms that “make no economic sense” in an effort to either buy or eliminate Altitude — and then replace it with a Comcast-operated RSN to “control sports programming” in Colorado. Altitude outlines alleged Comcast business tactics that have reduced or eliminated independent RSN’s across the country. In theory, a positive ruling for Altitude could force Comcast to offer contract terms the RSN deems acceptable.
Bill Isaacson, the outside counsel hired to represent Altitude, told The Denver Post in November that “we’re prepared to do this the whole way.” However, industry precedent suggests a jury trial is unlikely, said Tim Lacomb, a San-Diego based attorney at MoginRubin LLP, who specializes in antitrust, unfair competition and complex business litigation.
“These cases do not go to trial very often, especially cases brought by private plaintiffs as opposed to the federal government,” Lacomb said. “Putting this case in front of 12 jurors brings in a lot of unknowns that Comcast will not want to deal with at trial.”
What is Comcast’s defense?
Comcast claims Altitude is conflating a “routine commercial disagreement” with inaccurate violations of antitrust law to pressure Comcast into renewing its contract “on terms that exceed Altitude’s value to Comcast’s customers.” Comcast does not operate a Denver-based RSN and claims it is a customer, and not a competitor, for Altitude.
A former RSN executive said: “Nothing concerns distributors … scares them more or infuriates them more than anti-trust language. Because they’re big, and big implies antitrust.”
How long might the Comcast-Altitude blackout continue?
In a worst-case scenario, the standoff continues for multiple years. SportsNet LA went six consecutive MLB seasons (2014-19) without local games on DirecTV before making a deal in April. A court ruling might ultimately decide when Altitude TV broadcasts return on Comcast, but the timing of that decision is unclear. The final pre-trial conference, according to online court records, is set for May 3, 2021.
A short-term resolution is possible. Just don’t get your hopes up. The two parties are deep-pocketed.
What are potential scenarios for how Nuggets/Avalanche games return on local television?
1. Public scrutiny of Comcast business strategy threatens significant financial loss (including more lawsuits) and it agrees to a carriage rights contract on Altitude’s terms. While unlikely, a jury trial verdict in favor of Altitude might also force Comcast’s hand.
2. A judge dismisses Altitude’s antitrust lawsuit, appeal attempts are unsuccessful, and Kroenke decides to exit the Denver RSN business. The Nuggets and Avalanche find new local TV homes with a different RSN.
3. Altitude merges with AT&T SportsNet Rocky Mountain to broadcast the Rockies, Nuggets and Avalanche under one roof.
4. Kroenke and Comcast salvage their relationship with the help of combined future business interests as mega-players in the sports-and-entertainment industry.