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Broadcast disintermediation

One of the emerging trends made possible by the proliferation in broadcast channels is the "in-sourcing" of delivery. The YES Network - the home of NY Yankees programming - was a pioneer in that regard. Up next: college conferences.

"We take risks; we want to be competitive," said Jim Delany, the Big Ten commissioner. "It’s in the nature of our sports and our institutions."

...By carving enough rights to create the Big Ten Network out of a new 10-year, $100 million contract with ESPN and ABC, Delany has bucked the trend to be satisfied only with rights fees from networks and has chosen to extend the conference’s brand, expand the reach of its recruiting and build a valuable asset.

The channel, which Fox Cable Networks will run and own 49 percent of, will carry 35 football games, 105 men’s and 55 women’s basketball games, archived games dating from 1960, Olympic sports (the rights to some of which are still owned by CSTV through the 2007-8 season) and 660 hours a year of academic programming.

The dispute over the Big Ten Network, which is to go on the air in August, is typical of the tensions between cable operators and sports networks. The cable operators prefer not to add sports channels, whose costs of acquiring the rights to carry teams are inflated by high player salaries.

The Big Ten Network will be paying the conference a $50 million annual rights fee — not much less than what SNY is paying the Mets or YES is paying the Yankees.

Comcast discussed becoming the Big Ten’s partner in the network, before Fox entered, but the talks foundered over the cable operator’s view of a more limited, less expensive channel than the conference envisioned.

The story, by Richard Sandomir in today's NY Times focuses on the dispute between the Big Ten and Comcast, the cable TV provider. Obviously, Sandomir's remark about player salaries is a howler, especially given the following sentence, in which the value of the Big Ten Network - where players are unpaid - is compared with that of the Mets and Yankees.

Niche networks and cable TV don't seem to get along amicably. Perhaps this is related to the scarcity of bandwidth on cable relative to satellite television, where disputes don't seem to occur. Regardless, the trend where sports leagues create their own programming, bypassing their old intermediaries, is unmistakable.