The following interview took place Wednesday, October 3rd, 2007 on the Michigan Insider morning show on Sportstalk 1050, WTKA. Big Ten Network President Mark Silverman came on first... followed directly by Director of Communications for Comcast Midewest, Patrick Paterno.
***For those who missed part one, click here.
Sam Webb: Director of communication from Comcast Midwest Patrick Paterno joins us right now. How are you doing this morning Patrick?
Patrick Paterno: “Good morning gentleman. Thanks for having me on this morning.”
Sam Webb: I appreciate you coming on with us this morning, because it is rare that we get any insight from the other side of the ledger. We have heard a lot from the Big Ten, but not very much from Comcast. I guess we should start out with asking, what exactly when you talk about the unreasonableness, or from your standpoint the unreasonableness of the Big Ten Network, what is the major sticking point from Comcast at this point and time?
Patrick Paterno: “Well the sticking point is and this goes out to all our customers; we said from day 1 that we want to carry the Big Ten Network, we just want to put it on our sports and entertainment package, making it available for customers who really want it. Not everyone is a sports fan and we feel that that is the best place to put this kind of programming.”
Sam Webb: Now we are joined by Patrick Paterno, direct of communications for Comcast Midwest here in the Michigan Insider on Sports Talk 1050. When you open it up like that, when you say’ people who really want to watch it,’ it sort of opens the door for people who say okay that sounds like ala carte programming. There are channels on my cable box right now that I have absolutely no interest in, yet they are on my selection package. Why then can’t you put the Big Ten Network on there for people, especially in the Big Ten region, where concievably there are people that really want to watch it. Why wouldn’t you put that channel on the extended basic cable package in this region?
Patrick Paterno: “Well, you know with our package we have CSTV, we have Golf Channel, NBA TV, NFL Network and other sports programming and on Monday we are going to add CSS and you know, we have a very good sports programming and granted you our a sports station and you guys have a lot of sports fans out there, but there are a lot of customers who just do not want to pay to watch sports.”
Sam Webb: Lets talk about this rate. The rate that is put out there, it seems everywhere you loo,k is $1.10. We just had Big Ten Network President on Mark Silverman on and he said that that is not the rate, it is actually much smaller… and then that outside of the eight state Big Ten footprint, they are actually asking for far less in terms of the rate per subscriber than they are asking for within the Big Ten region. Is that true?
Patrick Paterno: “Well, you know again with the $1.10 that has been thrown out there. The majority of customers also that are out there do not want to pay Fox and the Big Ten the hundreds of millions of dollars that they are demanding. Especially, you know, I know Mr. Silverman talked about all the sports games that you get with Comcast, which is true. You get over 150 college games and you get the best Big Ten match ups on Comcast and without the additional burden.”
Sam Webb: But with Michigan, you are not getting all the games right now, which I think is the issue for Michigan fans. But to get back to this issue, when you talk about the availability. Certainly outside of the Big Ten region, which is one of the things that I have seen written in papers, ‘well people around the country will not want to watch this station.’ If the Big Ten is saying, “hey, you know what, we want to charge significantly less for this channel outside this region” or “hey, we are even willing to let you put it on a digital sports tier outside the Big Ten region”, then what is the issue at that point if they are willing to show that kind of flexibility outside of the Big Ten eight state footprint?
Patrick Paterno: “Well again getting back to what I stated early, we are willing to put the network on, we just want to put it on our sports and entertainment package and that has been our statement from day one with talking with the Big Ten Network.”
Andy Evans: Talking to Patrick Paterno, director of communications for Comcast Midwest region. Patrick thanks for coming on first of all. (Patrick Paterno: “Thank you.”) You know, I do not know, I am assuming that you might have heard some of our conversation with Mark Silverman based on your last comment, but at the same time, the only thing that seems kind of strange to me; I am not a Comcast subscriber, because I do not live in the area and I get the BTN on my cable system. But the two cable systems that have not gotten involved with this, are two of the giant cable systems and to me it seems like there is a lot, you probably will tend to agree with this, there are a lot of cable markets that are taking this for the opportunity to get more of a share of a market, considering that you guys at Comcast and Time Warner controls so much of the market. Would that be more accurate?
Patrick Paterno: “Well, I mean, you know, you can look at that two ways. With Comcast, you know we offer video on demand service. You know with a huge library that other competitors do not have and you know there are things that we offer also that they do not offer. Our video on demand is free of charge and you know has an extensive library of movies and shows and things like that that you would not get if you did not have Comcast.”
Andy Evans: Well, I do not know if that is quite the question that I was asking, but at the same time I just think it is kind of odd that sure they are throwing all these cable company names out there, but they are really not companies that have as much play as Comcast and the other one mentioned as Time Warner. What we get a lot here, a lot people obviously in this region angry that Comcast, you know it tends to be Comcast’s fault. That is the feedback that we get. I do not know the play, but you see a lot of the numbers and people call up saying, “well we are dropping our cable and going here.” I hope you are as open with me as you can be, but are you seeing a lot of people getting away from Comcast out of frustration,n or does it seem to be a lot of talk at this point?
Patrick Paterno: “I will tell you, out of our 1.3 million customers here in Michigan, there are only a very few who have told us that they are choosing a competitor because of this channel. I do not have specifics in detail (Andy Evans: “No that is enough though.”). I do not have details, but I can tell you that it is a very small number by any measurement.”
Sam Webb: We are talking to director of communications for Comcast Midwest Patrick Paterno here on the Michigan Insider on Sports Talk 1050 WTKA. Patrick, one of the things, getting back to this rate, this $1.10 or whatever the rate is; there is a suggestion that that cost will be incurred by we the subscriber. Where as you got WOW! and RCN that recently picked up the Big Ten Network without any cost transference to the subscriber. How is it that if Comcast picks it u,p that it will automatically be transferred to your subscribers? For instance, lets say ESPN Classic, when that left it is not like the subscriber rate went down. I mean we were paying the same cable rate, so how exactly does that work?
Patrick Paterno: “Well to be honest with you, you guys are talking sports. ESPN is the most expensive channel on any cable programming and secondly the Big Ten Network would be the second most expensive programming on the network.”
Sam Webb: In this region or nationally?
Patrick Paterno: “In this region.”
Sam Webb: Ok. In this particular region does the appeal in this region, does it not warrant... I do not know what the rate is. Mark Silverman said that it is not a $1.10. Can we establish whether or not it is a $1.10. Is it $1.10 that they are asking for right now?
Patrick Paterno: “You know, I am not at the negotiation table. That has been a number that has been out there. He has not said what his number is and frankly, like I said, I am not at the negotiation table, so I do not know what the sticking price is. All I know is that we have said from day one that we are willing to talk to them about the Big Ten Network and putting it on our sports and entertainment package.”
Sam Webb: “So, can you say there is a number that they can get to that would convince Comcast that it could go on the extended basic cable package?
Patrick Paterno: “I can’t comment on that number.”
Andy Evans: Patrick you talk about some of the other sports programming on your sports package and I guess except with CSTV, I look at golf and maybe NBA TV might be an exception as well, but certainly the NFL Network, all these channels seem to be able to carry themselves throughout the year. Is that a concern with the Big Ten Network and the fact if you were to put them on basic cable is what they are going to provide during the summer, because obviously there is not much going on during the summer.
Patrick Paterno: “Well you know that is a great point. We have had customer feedback and people have mentioned that in the summer, what kind of program are they going to offer, because once basketball season and baseball season is over, will they be rerunning great games like ESPN Classic has running all the time. We do not know that, but that is a great point.”
Sam Webb: Now Patrick one of the things that we have talked about here is that the ala carte service that you seem to balk a… Comcast seems to really balk at the suggestion of having ala carte. How are channel lineups determined. Lets say for instance that this is a big deal in the Big Ten region, is there a way by which the local cable companies and local cable services can negotiate to have the Big Ten on the basic cable package here? How exactly does that part of it work?
Patrick Paterno: “Well, I mean, the Big Ten Network, I mean from day one, not to get to your question, the Big Ten Network it was stressed at the beginning that Comcast did not want to offer the Big Ten Network and you know that has been, still I think that has not been clear that we want to offer this network and we do. We just want to put it where it is fair to the customer. I know, go ahead… Repeat your question.”
Sam Webb: Well, I guess what I am getting at here is that one of the sticking points seems to be that it is not a universally desired programming choice. Ok fine, I can get with the idea that maybe it is not something that is desired outside of this footprint. But lets say that we are looking at our channel lineup here in Ann Arbor and there are lots of channels on there right now that personally… I know a lot of folks that I talk to, I am not suggesting that represents everyone, but there are a lot of channels that we look at on our current lineup and say, ‘hey, I don’t watch this channel; I do not really want this channel, but I am paying for it every month in my cable cost.’ So why is it that a channel that I really want, can’t be in place of some of these others that are already here. How is that channel lineup determined?
Patrick Paterno: “Well, you make a great point there, but there are also people like you who want the Big Ten Network on your program, but there are people that want Food Network and want HGTV and want those kinds of programming, where they are not sport fans.”
Sam Webb: Right, but I have to pay for it though.
Patrick Paterno: “The rating for Food Network and HGTV are very high.”
Sam Webb: But you also have like the G4 channel. You have channels on there, and I do not know what the ratings are per channel, but the thing you are suggesting is that people who do not want the channel, they shouldn’t have to pay for it. Well if that is the case, why should people who don’t want G4 or do not want Versus… why should people have to pay for those if they don’t want those?
Patrick Paterno: “Well the programming, you know cable programming, the stations are the stations. Smaller programming, programming costs go up under ala carte, not down. So smaller channels suffer under that model.”
Sam Webb: Ok just to crystallize this and to put a wrap on it. Lets say that it goes to a digital sports package; I don’t think that will happen, but how long would those rates freeze before they go up… or would they stay constant?. And then #2, just get back to this one more time, if the Big Ten Network refuses to come off of its stance to be on the extended basic network package and they insist upon having this be part of that service, how much of that cost would be transferred then to the user. Would it be the full amount, would be to the full $1.10 hypothetically?
Patrick Paterno: “That is a question that you know I cannot answer. It would have to be with negotiations. That is just a question, there are a lot of what ifs there. So that is just a question that would have to be answered in the negotiations. As I have said, we are willing to talk to them but our sticking point is that we want to have it on the sports and entertainment package.”
Andy Evans: When will the negotiations continue?
Patrick Paterno: “Well, we are willing to talk. So and you know, we are willing to talk to the Big Ten Network, you know about how to add their channel to the sports and entertainment package.”
Sam Webb: Alright, alright, thanks a lot.
Patrick Paterno: “Thank you so much for having me on this morning.”