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Analysis: What happens if Armstrong takes over Penguins broadcast rights?

Tuesday, June 22, 1999

By Barbara Vancheri, Post-Gazette Staff Writer

Passing the broadcast rights for Penguins games from one cable company to another might not be as smooth as Jaromir Jagr leading a two-on-one break, but it could be done.

Producing a package of Penguins games would presumably not be a huge technical hurdle for Armstrong Cable Services, the Butler firm that is working with Mario Lemieux's investment group. The Lemieux group wants to replace Fox Sports Net Pittsburgh, which now has the broadcast rights for Penguins games.

Companies exist that supply cameras, production trucks, equipment and the roughly two dozen people needed to make the whole operation run at game time. Mike Lange, because his contract is so intertwined with the broadcast rights, likely would end up in the booth even if such a transfer was to take place.

A bigger question is, who would see the games?

Fox Sports Net Pittsburgh has a channel spot on 100-plus cable systems reaching 2.1 million viewers in Pennsylvania, West Virginia, Ohio and Maryland. Even in its infancy, when it was more of a shoestring operation, it reached 600,000 subscribers.

Armstrong, by contrast, has just under 200,000 total subscribers in four states, the only places it could force the games to be carried. It has a small pool of subscribers in Allegheny County, which is dominated by TCI and Adelphia Communications. Securing a spot on those systems for a fledgling sports network might be all but impossible.

TCI, the nation's largest cable operator, has 14 million basic subscribers across the country, while Adelphia has 1.9 million.

More likely, Armstrong would have to partner with someone who already has a channel spot on those systems -- most likely a Pittsburgh-area broadcast station -- to carry the game packages produced by Armstrong. But that would be a far less lucrative arrangement for Armstrong, which would have to share the advertising dollars that make the Pens such attractive programming.

Armstrong also could decide to produce the games and then sell the rights to broadcast them to other programmers, such as cable services that have more subscribers, even Fox Sports Net Pittsburgh.

Neal Pilson, president of the New York-based sports television consulting company Pilson Communications and former president of CBS Sports, said losing the Penguins would hurt Fox Sports Net Pittsburgh.

"They'd still have the Pirates April through September, but the Penguins give them year-round programming October through May," Pilson said. "It would be a severe loss for the Penguins to go to another channel."

Losing the Pens also would be a blow, at least in terms of prestige. Fox kingpin Rupert Murdoch has made sports programming a key to his media empire, spending more than $300 million last year to purchase the Los Angeles Dodgers and failing in a bid earlier this year to purchase Britain's Manchester United soccer team for $1 billion.

Pilson downplayed the scenario in which Armstrong would resell broadcast rights to Fox Sports Net Pittsburgh, saying the dominant carrier probably wouldn't carry the team except on terms it could negotiate to its benefit.

"The big guy is going to exert a lot of leverage," Pilson said. "It's hard for me to picture that transaction. I suppose if there was enough public pressure for Fox to carry the games some sort of deal might be worked out. It would certainly be an unusual series of negotiations."

Pilson said a more likely outcome would be for Armstrong to sell Penguins rights to area cable companies on a system-by-system basis.

"It's non-traditional. I'm not aware of a similar situation," he said. "It would be somewhat threatening to Fox because they've taken the position around the country that they want to be the carrier of record for the professional sports teams in the regions covered by their networks."

TCI started the Pirates Cable Network, today known as Fox Sports Net Pittsburgh, in April 1986. Realizing the name wasn't inclusive of other sports, executives quickly changed the moniker to KBL and, later, Prime Sports KBL. In 1996, it became Fox Sports Pittsburgh and, in March of this year, was rechristened Fox Sports Net Pittsburgh.

KBL reached a milestone in August 1990 when it signed its first three-year deal with the Penguins. In 1993, the parties announced a multiyear agreement that included radio rights and cable and broadcast TV rights.

"This year, we did 73 regular season games, but some of those games appeared on WB 22 (WCWB-TV). And we did all the playoff games that were not nationally telecast," said Larry Eldridge, public relations director for Fox Sports Net Pittsburgh. An agreement with the Penguins for the TV and radio rights was scheduled to go through the 2005-2006 season.

"We've partnered with the Penguins in a variety of ways beyond the actual telecasting of the games," says Eldridge. Fox Sports Net produced eight or nine 30-second public-service announcements as part of the "Keep 'Em Here!" campaign with Myron Cope, Mike Lange, Mayor Murphy, Jim Krenn and others.

Fox Sports Net Pittsburgh carries the popular "SportsBeat" show, which also serves as the Penguins pre-game show, with hosts Stan Savran and Guy Junker. It televises some University of Pittsburgh, Penn State and West Virginia University basketball games, WPIAL high school football and basketball championship games and imports college football and basketball games from its Fox Sports Net parent.

In addition, it broadcasts Pirate games, Major League Baseball games, PGA tour coverage, NFL European League games, live coverage of the Steelers weekly press conferences, "High School Extra" with Junker and the national Fox sports news show.

Staff writers Rob Owen, Barbara Vancheri, Ron Weiskind and Ken Zapinski contributed to this report.

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