DirecTV to Drop Versus, WEC?

Key_art_versus_mediumThis story has flown under the radar (except on hockey blogs), but yes, Versus and DirecTV are having a spat. The existing deal between DirecTV and Versus expires after August 31st and the parties are presently unable to reach an agreement on financial terms to continue the partnership:

Versus, formerly Outdoor Life Network, was rebranded in 2006 and is the home of the National Hockey League as well as collegiate sports from the Pac-10, Big 12, Mountain West and Ivy League conferences, the Tour de France bicycle race, Davis Cup Tennis, the Professional Bull Riders (PBR), World Extreme Cage fighting (WEC), the Indy Racing League and Professional Boxing.

The network is available in about 75 million homes and is wholly-owned by Comcast. It is unclear how many subscribers the network has on DirecTV, which has about 24.2 million subscribers overall.

In a statement, DirecTV said that the dispute centers on carriage fees. According to SNL Kagan, Versus was getting about 18 cents per subscriber per month in carriage fees from cable operators in 2009.

"In our contract discussions, Comcast has demanded a deal for Versus that is not comparable to other providers and is pushing for a significant rate hike that does not reflect current market terms or the value of its programming," DirecTV said in a prepared statement. "We will continue to try and negotiate a fair deal, but we intend to hold the line on our programming costs and protect our customers against these unfair demands that are both discriminatory and wholly unrealistic given current market rates. If we do not reach an agreement, the network will come down on Sept. 1 following the expiration of our contract with Versus."

DirecTV has a different take:

A brief question and answer on DirecTV's website puts the blame for this issue on Versus.

Versus is asking for terms which do not reflect the market and which they are not asking of all other distributors. DIRECTV wants to keep your monthly fees low, so it's doing everything it can to avoid paying exorbitant programming fees.

Obviously, the NHL is affected, as they are the main anchor of Versus' programming.

The crux of the issue is that Versus believes it's beefed up sponsor-friendly sports programming (both traditional sports in hockey, college football as well as combat sports in the form of the WEC, boxing, Contender and Contender: Asia, etc.) as well as adding enough households to warrant a higher fee for their product. Clearly, DirecTV believes Versus is asking for a price outside of the existing market value, hence the impasse.

I'm hesitant to openly suggest this situation is yet more evidence for the argument that the WEC should be folded into the UFC. Admittedly, the more Zuffa's major operations each have unique arrangements with different business partners affecting outcomes, the more getting matters correct and delivering your product becomes a balancing act. Obviously folding the WEC into the UFC creates an entirely new set of problems to contend with, but being stripped from dozens of millions of homes in the fledgling stages of the WEC's growth is not one of them.

But realistically, can Spike offer enough room for a bloated UFC with eight weight classes? Likely not. The WEC's current arrangement with Versus is, on balance, a profitable and logical one. The present situation is unfortunate and potentially disastrous, but the obvious fix is so not so clear. I also do not hold WEC brass responsible. This appears to be merely a dispute within the cable industry that's holding up MMA, racing, biking, hunting and hockey as potential collateral damage.

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