The Chairman of the Federal Communications Commission (FCC) issued a stern warning to Comcast and the owner of the YES Network this past weekend: Get in a room and hammer out a new distribution deal, or else.
The edict follows news of a potential carriage dispute between the two companies, which almost certainly hinges on the distribution fees that companies like Comcast must pay programmers like YES Network in exchange for providing their live sports and other shows on Xfinity TV systems in the New York market and other parts of the country.
YES Network, owned by the New York Yankees with investments from Main Street Sports (formerly Diamond Sports Group), Amazon and a handful of private equity groups, offers locally-televised games from the New York Yankees and the Brooklyn Nets.
Comcast does not offer Xfinity TV in New York City proper, but does sell pay TV services in neighboring New Jersey and Connecticut, and portions of New York outside the city itself.
Comcast and YES Network’s distribution contract was set to expire last Thursday, but the two companies avoided a blackout last week after reaching a temporary deal to extend its prior agreement. That deal is expected to lapse this week.
In a statement, a Comcast spokesperson said the company offered to distribute YES Network in the same Xfinity TV package that nearly two dozen other regional sports broadcasters had accepted in more than 100 territories across the country.
“YES Network has insisted we pay higher fees when nearly 90 percent of customers watched fewer than 5 of the (nearly) 130 Yankees games it aired last season,” the spokesperson said. “If we lose the rights to carry YES, we will credit our customers, and most will receive between $7 to $10 a month.”
Over the weekend, FCC Chairman Brendan Carr wrote that he was “aware that the YES Network could soon get dropped from Comcast systems,” and urged “a quick and favorable resolution for the benefit of everyone.”
“The FCC does have authority to step in and address claims of discriminatory conduct,” Carr wrote. It isn’t clear what discriminatory conduct allegations may have been lodged informally with the FCC, if any.
The FCC does have the ability to regulate Comcast’s pay TV agreements with programmers like YES Network if either side does not negotiate toward a new contract in “good faith” — a term that is loosely defined — but it cannot force Comcast or any other pay TV company to carry a channel that it does not otherwise want to.
If Comcast drops the YES Network, Xfinity TV and Xfinity Internet subscribers can still access live games by purchasing direct access to the regional sports network through the Gotham Sports App, which charges $25 per month or $240 per year for YES App.
