The carriage dispute between Altitude Sports & Entertainment and Comcast -- and the continued fraying of the pay-TV model -- has taken a litigious turn.
After failing to strike a new deal with Comcast, Altitude, which operates a regional sports network (RSN) featuring the NBA's Denver Nuggets and the NHL's Colorado Avalanche, has filed a lawsuit alleging that the cable operator is violating antitrust laws by attempting to drive Altitude out of business and looking to possibly take over the local sports TV market with its own regional sports network. Comcast called the lawsuit "meritless" while also calling on Altitude to instead "engage in responsible commercial negotiations."
Altitude's carriage agreement with Comcast ended on August 31, and the regional sports network has been blacked out on Comcast's pay-TV service in the region ever since. Altitude is at a similar impasse with Dish Network, but recently inked a new distribution deal with AT&T/DirecTV. However, Comcast is the largest pay-TV provider in the region, with an approximate 57% share, according to Altitude's estimates.
In the complaint, filed Monday with the US District Court for the District of Colorado, Altitude contends that Comcast is demanding "dramatic cuts" in rates to be paid to Altitude, and to have Altitude shift from Comcast's widely distributed expanded basic pay-TV package to a less popular sports package that is sold by Comcast for an extra fee.
Altitude claimed that a move to Comcast's sports package would reduce the RSN's penetration with the cable operator to 15% in the region, rather than the 70% minimum penetration Altitude enjoyed with its earlier deal with Comcast. Such a reduction would hinder Altitude's ability to sell advertising and would, more generally, destabilize its entire business, Altitude claimed.
Altitude, which also carries games for the Colorado Mammoth (National Lacrosse League) and the Colorado Rapids (Major League Soccer), likewise argues that the terms proposed by Comcast "make no economic sense." The RSN believes that it's Comcast's desire to drive Altitude out of business, acquire Altitude at a "dramatically discounted rate," and possibly swoop in with its own regional sports network for the market.
Reclimbing The Mountain?
As for that last claim, Altitude believes that Comcast, if it is successful in killing off Altitude, would be in position to fill the void quickly by ramping up its own RSN for the area. Altitude notes that, in 2006, Comcast teamed with two college associations to form The Mountain, a regional sports network that was operated out of the Comcast Media Center in Centennial, Colo.
Though The Mountain halted operations in 2012 following some college conference realignments, Altitude held that the remaining infrastructure from The Mountain coupled with Comcast's national sports programming presence "means Comcast could enter the RSN market in the Denver area quickly."
"If Comcast is successful in its campaign against Altitude, Comcast will quickly and easily take over regional sports production in the Denver DMA," Altitude said, claiming further that this would characterize Comcast as a "rapid entrant" that could therefore be considered a direct competitor to Altitude for antitrust purposes.
Comcast said it will "vigorously defend" against Altitude's lawsuit.
"This is a meritless lawsuit in an intensely competitive market where Comcast has no competitive regional sports network and Altitude has multiple distribution alternatives," Comcast said in response to Altitude's lawsuit. "Instead of pursuing baseless litigation, Altitude should engage in responsible commercial negotiations that would allow Comcast to distribute its programming to those customers who want it without driving up costs for customers who do not. Since at this point Altitude has rejected all reasonable offers, we have provided our customers with a credit until we reach an agreement. We will vigorously defend ourselves against Altitude's claims."
Altitude has also already called the idea of creating a standalone, direct-to-consumer streaming version of its service a non-starter. In September, Altitude said the OTT model isn't economical for the RSN, holding that it would be impossible for Altitude to achieve enough subscriber scale for the offering to pay off or to create an OTT service that enough consumers could afford.
Altitude, the Stanley Kroenke-owned RSN, has yet to strike a deal with a virtual multichannel video programming distributor (vMVPD) such as YouTube TV or fuboTV. But as it sought out other options, the RSN told The Denver Post in September that Altitude had explored the idea of partnering with Amazon. While that idea has yet to bear fruit, Amazon has shown interest in national and regional sports streaming service. In addition to recently acquiring a stake in The YES Network, the RSN that provides exclusive regional coverage of the New York Yankees, the Brooklyn Nets, New York City FC and the New York Liberty, Amazon also has a deal to stream Thursday-night National Football League games.
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- Altitude TV Exploring Streaming Pact With Amazon – Report
- Amazon Snares Piece of the YES Network From Disney
- US Pay-TV Loses Another 1.2M Subs in Q3
— Jeff Baumgartner, Senior Editor, Light Reading