December 1, 2010 / 9:23 PM / 9 years ago

MLB Network shoots for 70 million U.S. homes

NEW YORK (Reuters) - Major League Baseball hopes its cable TV network will reach 70 million U.S. homes before next season, but the U.S. sports league will not resort to giving more equity to broadcasters to speed the process along, a top executive said on Wednesday.

MLB Network, currently in about 56 million U.S. homes, hopes distribution deals can be reached soon with DISH Network and AT&T, the network’s top executive, Tony Petitti, told the Reuters Global Media Summit.

Since a record-setting launch in January 2009 in more than 50 million homes, expansion of the network has slowed. The deals to catapult it to 70 million homes could come before the start of the baseball season next spring, Petitti told Reuters Insider in a subsequent interview.

“There’s two major players that don’t have the network,” he said. “If one of those players came in, we’d be right on top of the 70 (million) number, and if both come in we’d probably exceed it.”

DISH and AT&T reach about 14.3 million and 2.7 million U.S. homes, respectively.

Other sports cable TV networks include the NFL Network, which reaches 57 million U.S. homes, Comcast’s Versus, with 75 million and Walt Disney’s ESPN, at almost 100 million homes, according to Nielsen.

Numerous other sports properties, including the U.S. Olympic Committee and World Wrestling Entertainment, are eyeing setting up their own sports networks.

MLB officials gave one-third of its network to satellite operator DirecTV and cable companies Comcast, Time Warner Cable and Cox Communications to ensure broad distribution, a strategy Petitti called correct. However, that approach is not likely to be repeated.

“I don’t think that’s necessarily on the table at all,” he said, adding that additional content would help build demand.

While declining to reveal revenue or profits for the network, Petitti said ad sales will finish up more than 20 percent this year and the league is looking at recouping its original investment just after the first quarter.

MLB, which saw overall revenue hit a record $7 billion this year, will then be faced with what to do with the profits, he said.

“We’ll have the ability to make distributions in 2011,” Petitti said. “That’s really up to the commissioner’s office as to what form those take and when and what they want to do with that money.”

Meanwhile, revenue at MLB Advanced Media (MLBAM), the league’s Internet and digital unit, is growing at 15 percent to 20 percent annually, the division’s top executive, Robert Bowman, said at the media summit in New York. He declined to reveal what revenue had grown to from the $400 million disclosed in 2007.

Bowman also said baseball’s 30 owners need to weigh growth through continued investment against cashing out.

“As to the right dividend policy ... there’s a real push and pull as to how much,” he said. “You can probably remit higher dividends, but you’re investing in your business and creating an asset.”

Bowman said baseball had no plans to sell either media asset in an initial public offering, saying the league was investing for the long term.

MLBAM was formed in January 2000 with an investment of $75 million from the clubs, and bankers two years later valued the business at more than $2 billion when an IPO was explored.

Reporting by Ben Klayman; Editing by Tim Dobbyn

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