EchoStar deal giving Fox Altitude sickness
Satcaster is net's only distrib
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Altitude has done damage to Murdoch's existing Fox Sports Network Rocky Mountain as the pro-basketball Denver Nuggets and pro-hockey Colorado Avalanche have exited FSN Rocky Mountain in favor of Altitude.
Kroenke owns the Nuggets and the Avalanche, so when their contract with FSN expired earlier this year, he decided to make the teams the linchpins of Altitude, which opens for business in September. EchoStar is Altitude's first client; no other distributor -- neither a cable operator nor EchoStar's satellite competitor DirecTV -- has yet signed with the network.
"Signing EchoStar is the biggest deal we've done" since the founding of Altitude, said Jim Martin, CEO of the fledgling network.
Martin declined to discuss deal terms, but EchoStar will pay Altitude a stiff monthly fee of $1.75 per subscriber, making it one of the satellite distributor's most expensive networks. The size of the license fee is a key reason why cable ops have shied away from doing a deal so far.
EchoStar will transmit Altitude to hundreds of thousands of subscribers in a 10-state area whose residents have shown an interest in the Nuggets and Avalanche.
Martin said EchoStar is already devising an ad campaign urging sports fans to cancel their cable or DirecTV subscriptions and sign up with EchoStar's Dish network in order to ensure they'll get the Nuggets and Avalanche games from day one of the 2004-05 season.
Domino effect
EchoStar's strategy adds a powerful weapon to Altitude's negotiating arsenal. If thousands of customers take EchoStar up on its offer and start defecting from cable and DirecTV, Altitude is confident that the most significant cable operators in the area -- Comcast, Adelphia and Charter -- will eventually come on board.
Earlier this month, FSN Rocky Mountain scored a victory over Altitude when it agreed to fork over $200 million to Major League Baseball's Colorado Rockies for a 10-year extension of its contract with the team, tacking on an extra payment of $20 million for a 12% equity stake in the Rockies.
