An Ignoble Experiment

2. ESPN to use AT&T U-verse deal to demand expanded basic slot for SEC network

BCI Broadband, the cable MSO launched earlier this year by former Bresnan Communications executives, said Friday that it recruited veterans of Mediacom Communications and Insight Communications.

It named former Mediacom SVP of Field Operations and Fulfillment Vin Zachariah SVP of residential services, and former Insight executive Diane Quennoz SVP of marketing.

Quennoz had been VP of marketing and customer experience at Insight, the cable MSO that Time Warner Cable (NYSE: TWC) acquired last year for $3 billion.

BCI struck a deal last month to acquire James Cable's systems passing 120,000 homes in Louisiana, Tennessee, Georgia, Wyoming and Colorado. The company, which describes itself as a "next-generation cable MSO," came on the scene in January, when it agreed to acquire Allegiance Communications and its cable systems in Oklahoma, Kansas, Missouri and Arkansas.

Led by Bresnan veterans Jeffrey DeMond and Andrew Kober, BCI has said it is looking to expand through more cable system acquisitions.

For more:
- see the release

Read more about: Bresnan
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By Steve Donohue

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3. Bidding war: Intermedia raises offer for Outdoor Channel to $237M

AT&T (NYSE: T) agreed to carry a new college sports network that ESPN and the Southeastern Conference will launch in August 2014 on its U-verse TV systems, setting the stage for a distribution battle with Comcast (Nasdaq: CMCSA), Cox, Charter Communications (Nasdaq: CHTR) and other distributors with systems in states with SEC schools.

Source: ESPN

ESPN executives said Thursday that they will push distributors for expanded basic carriage near SEC schools, including those in Florida, Georgia, Louisiana, Mississippi, Kentucky, Tennessee and Alabama. "We will target the widest distribution possible in the 11-state SEC footprint--so carried on a similar level of service as ESPN," SVP Justin Connolly said at a press conference Thursday afternoon, according to a transcript provided by ESPN.

Connolly, a former affiliate sales exec for ESPN who will run the network from an office in Charlotte, N.C., said ESPN would allow affiliates outside SEC markets to put the network on sports tiers "comparable to where ESPNU is today."

Signing AT&T as the first affiliate could give ESPN and the SEC leverage, as U-verse TV is in 4.8 million homes after picking up 232,000 subscribers in the first quarter. The National Football League used a similar strategy when it added regular season games to NFL Network, with AT&T using its distribution deal in subscriber acquisition campaigns targeting football fans.

"It's still very early days in terms of our discussions with distributors. I will say that having the fastest-growing distributor on board 16 months in advance of launch certainly provides us a whole lot of optimism when it comes to having those conversations," Connolly said.

The SEC network follows the 2008 launch of Big 10 Network and last summer's debut of Pac-12 Network, which both waged public battles with cable and satellite providers. DirecTV (Nasdaq: DTV) still doesn't carry Pac-12 Network.

ESPN and SEC officials said the network will focus on multiplatform programming options, similar to Pac-12's strategy of offering subscribers the ability to watch live programming on tablets and smartphones. SEC content will also be available on gaming consoles such as Microsoft's (Nasdaq: MSFT) Xbox.

The SEC network will focus on top college football and basketball games, including matchups featuring Kentucky basketball games and Alabama football games. ESPN said the network will also feature track and field, tennis and softball.

For more:
- see the release

Commentary: Tracking the top 10 worst programming disputes of all time

Read more about: Comcast, AT&T, SEC
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By Steve Donohue

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4. Cable One sheds 5,435 video subs in Q1 2013

The bidding war for Outdoor Channel heated up Friday morning, after Leo Hindery's Intermedia Outdoors raised its acquisition offer to $9.75 per share, or $237 million in cash.

Intermedia's bid came hours after Outdoor Channel's board announced that it agreed to accept an increased offer of $9.35 per share from Kroenke Sports & Entertainment, which is controlled by Denver Nuggets owner Stan Kroenke.

Intermedia, which owns The Sportsman Channel, offered to merge with Outdoor Channel last November when it offered $8 per share for the hunting and fishing channel. But Kroenke thwarted that deal in March when he made an unsolicited bid of $8.75 per share, or $227 million in cash. Intermedia had raised its bid on Tuesday to $9.15 per share.

Outdoor Channel said in a statement Friday that its board is reviewing the latest proposal from Intermedia. Outdoor counts about 39.5 million U.S. subscribers, and it also distributes programming in more than 50 other countries.

For more:
- see the Intermedia release
- see the Outdoor Channel release
- Deadline.com has this story

Read more about: Kroenke Sports, Intermedia Outdoors
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By Steve Donohue

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5. Google Fiber expanding to Shawnee, Kansas

Cable One lost 5,435 basic video subscribers in the first quarter, a significant difference in performance compared to the same period last year, when it gained 916 video subscribers, according to an earnings report from The Washington Post Co., its parent company.

But the Phoenix-based cable MSO showed improvement compared to the fourth quarter of 2012, when it lost 11,442 video, 3,573 high-speed Internet and 1,119 telephone customers. Cable One picked up 4,491 Internet and 1,189 voice subscribers in the first quarter.

Despite the video subscriber losses, rate hikes helped Cable One grow its operating income by 12 percent to $36.6 million. Increased subscription fees also helped top MSOs Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC) drive increased revenue in Q1.

Cable One announced last month that it would spend $60 million on network upgrades. It plans to add 600 miles of fiber, replace 800 miles of cable and install 600 new nodes.

Washington Post Co., which also owns newspapers and TV stations, said it generated $4.7 million (64 cents per share) in net income in the first quarter, down from $31 million ($4.07 per share) this time last year.

For more:
- see the release

Special Report: Cable in the first quarter of 2013

Read more about: Cable One, The Washington Post Co.
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By Steve Donohue

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