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Time Warner Serves Up 15-Year Carriage Deal

BY ANDREA FIGLER

The Tennis Channel signed a 15-year carriage deal with Time Warner Cable, which plans to add the network to its digital sports tier nationwide before the end of the year.

The deal, scheduled to be announced today, calls for steady but slim license-fee increases, says Fred Dressler, EVP, Time Warner Cable. ?We wanted to ensure ourselves that we had price protection in doing sports,? Dressler says.

For the last few years, operators have been fighting with sports programmers over high license fees. ESPN, for example, increases its license fee about 20% each year.

Rather than lump a variety of sports channels onto basic analog or digital, Time Warner's Dressler has opted for digital sports tiers, a solution to the dilemma of either charging astronomical costs for sports content on a basic tier or offering each sports niche a la carte. He has cut deals with many networks to help secure low license fees and long-term carriage contracts with locked-in fee increases.

While neither party would disclose the license fee for the Tennis Channel, the network's chairman and CEO, David Meister, says 40 cents is too high an estimate. Most niche sports networks charge around 10 cents a month per subscriber, according to John Mansell, an analyst at Kagan World Media.

The Speed Channel is 10 cents, Outdoor Life 10 cents and ESPN Classic about 11 cents, he says.

The Outdoor Channel, a separate outdoor network, has a rate card of 8 cents a month for penetration over 50%, EVP Jake Hartwick says. The network has grown to 15 million subs, 11 million on digital (of which 2.4 million are on direct broadcast satellite) and 4 million analog.

Time Warner has already put the Outdoor Channel on its digital sports package in Los Angeles and Milwaukee.

Operators have worried that regional basketball fans may shun a digital package that also offers fly-fishing, but recent results should ease this concern.

In Los Angeles, Time Warner charges $1 for a digital sports package that provides the Outdoor Channel, ESPN Classic and the three regional Fox Sports digital networks ? Pacific, Central and Atlantic. Launched in January, the sports tier already has 5,650 subscribers. The Tennis Channel will be a part of this, says Deane Leavenworth, the system's spokesman.

In Milwaukee the system charges $3.95 for Outdoor Life, the Outdoor Channel, ESPNews, the Speed Channel, Fox Sports World and the three regional Fox Sports digital nets. The system launched this digital sports tier May 1 and already has 800 subscribers. ?We've gotten a good response,? a spokeswoman says. ?Obviously, customers are liking the fact that they have more choice.?

The Tennis Channel will be next on the list and will hopefully lure more women to the digital package, says Meister. And if a Time Warner system wants to run the network on analog, they can do so as well, he adds.

Other channels coming to a Time Warner digital sports tier soon could be an extreme sports network, such as EXPN, or a college network, such as the National College Sports Network. A women's sports network could also be in the works, says Time Warner's Dressler.

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