After doing the math, pay-TV providers appear to be sticking to their story that carrying the all-Los Angeles Dodgers channel SportsNet LA on Time Warner Cable’s terms doesn’t pencil out.
Time Warner Cable, which operates the channel, has been trying to sell it to pay-TV companies so the channel will be available on basic cable and satellite packages in Los Angeles. The cost would be between $4 and $5 per subscriber a month, with that price going up over time.
But nearly a dozen games into the baseball season, no major pay-TV company has signed up, at least not by the Business Journal’s press time, indicating that it might not have been a mere negotiating tactic when they declined to pick up the channel when it launched in February.
Pay-TV providers told the Business Journal that not enough people watch Dodgers games to justify the high price tag, and they don’t want to anger the bulk of their subscribers by raising their bills.
“The vast majority of our U-Verse subscribers only watch a few games a season,” said Chris Lauricella, vice president of content at AT&T in Century City. “It’s a lose-lose if we take the rates Time Warner Cable is asking now. We have to pass those costs on to subscribers or reduce our margins.”
Dan York, chief content officer at DirecTV in El Segundo, said the satellite company also has done extensive analysis of past viewership of Dodgers games on KCAL (Channel 9) and Fox Sports Prime Ticket and found the numbers don’t support Time Warner Cable’s asking price.
“We take a very data-driven, granular approach to determining fair value for all the content we carry,” he said. “We have a good sense of how many of our customers are truly Dodgers fans and how many are not – which is far and away the vast majority.”
The carriers want the channel; they know some of their L.A. subscribers want Dodgers games. But they’re hoping to bring Time Warner Cable down on price.
Meanwhile, they’re trying to negotiate alternatives, including putting the channel in a premium-priced package instead of the main tier, as it is on Time Warner Cable.
Also, pay-TV companies said they might want to offer the channel to customers on an a la carte basis or pay Time Warner Cable a fee based on viewership numbers.
Time Warner Cable is resisting these innovations, saying that they would change the rules midgame, since regional sports networks are typically offered in basic packages.
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