CMCSA Comcast Corporation

By Shalini Ramachandran 

Comcast Corp. dropped the YES Network, home of the New York Yankees and Brooklyn Nets, early Wednesday morning after the two sides couldn't come to terms over a new carriage agreement.

The cable giant said the price YES Network majority-owner 21st Century Fox was demanding was "not acceptable given the network's minimal viewership."

Comcast said well over 90% of the more than 900,000 Comcast subscribers who receive the YES Network "didn't watch the equivalent of even one quarter" of the 130 baseball games the network carried this past season. Comcast had been carrying the channel in Connecticut, New Jersey and Pennsylvania.

YES Network said Comcast's decision marks a "new low" for the cable giant's customer service. The network said the two sides reached an agreement "in principle" many months ago.

The sides agreed to several extensions in the interim to allow Comcast subscribers to watch Yankees games without interruption, people familiar with the discussions said. But because the network wouldn't agree to Comcast's "demands for special treatment and anticompetitive terms," the nation's largest cable operator is dropping the channel.

A person close to Comcast disputed the YES statement and said price was the main issue.

Regional sports networks have become a special point of tension between TV programmers and pay-TV providers in the last couple of years. Because of their passionate local fan bases, regional sports channels tend to demand relatively steep carriage fees from operators. But pay TV providers have sought to push back in recent times as cord-cutting pressures have heightened, opting in cases like the Los Angeles Dodgers' SportsNet LA not to carry the channels at all.

While Comcast is the nation's second-largest distributor, it and 21st Century Fox are major owners of regional sports networks. The two companies compete head-to-head in New York, where Comcast owns a stake in SportsNet NY, the network that carries the New York Mets.

With the Yankees season over and the Brooklyn Nets off to a less-than-stellar start, losing nine of the last 10 games, the YES Network may not have much leverage on its side at the moment. Moreover, the network is the most costly regional sports network, according to SNL Kagan, raking in $4.89 a month on average per cable TV customer. YES Network is carried in more than nine million homes in the New York market.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com

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(END) Dow Jones Newswires

November 18, 2015 01:19 ET (06:19 GMT)

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