DIRECTV Plans to Enter Arbitration with Comcast

A dispute about rate increases between DIRECTV and Comcast is leading towards arbitration. Comcast is attempting to get an increase for viewers to access team games, such as the Boston Celtics of the National Basketball Association and the San Jose Sharks of the National Hockey League. These increases amount to approximately 25 to 40 percent, which is substantial.

This has the potential to impact 2 million subscribers of DIRECTV. One positive note is that during the arbitration process, TV sports networks will probably stay on air.

Though Comcast has raised concerns about raising sports network costs, they are now attempting to get paid “above market” rates, which is slightly ironic, according to Derek Chang, Executive Vice President of Content Strategy at DIRECTV. He claims the increase is more than several times above that of normal rates for the market. Chang states, “It’s somewhat astounding that they can have two polar opposite views on the same topic,” and claims the rate would be 40 percent more for a third less programming.

Tim Fitzpatrick, spokesman for Comcast SportsNet said DIRECTV has undervalued the investments. He said, “We continue to negotiate in good faith and have put a fair offer on the table that reflects the growing value of our networks, the investments we have made in them, and is reasonable based on market trends.”

DIRECTV has sent a notice to Comcast that they intend to work through an independent arbitrator to come to an agreement. This would make a final offer, and could take anywhere between under 30 days and several months.