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Tag Archives: Time Warner Cable

Why Time Warner Cable Must Convince The Dodgers and Lakers That They Need Each Other

SportsNet LA Cartoon courtesy of Stop The CapThe folly that is SportsNet LA continues apace.

Last week, in a last-ditch attempt to get carriage for the Los Angeles Dodgers’ regional sports network (RSN) on TV services other than its own — and Charter’s, for obvious reasons — Time Warner Cable announced that it would lower the carriage fee of SportsNet LA for one year, from $4.90/month per subscriber to $3.50/month.

The answer from DirecTV, Dish Network, Verizon, and Cox? Still no. Carriers suggested to the Los Angeles Times that the one-year discount wasn’t a good bargain, and they expressed buyer’s remorse over TWC’s other LA-based RSN, TWC SportsNet, which carries the LA Lakers and the LA Galaxy, costs subscribers $4/month, and hasn’t been a huge success.

The end result is that only 1.8 million homes will carry SportsNet LA in this, Vin Scully’s final season as the voice of the Dodgers. At $4.90/month, the RSN will collect $105.8 million in carriage fees in 2016, the third year of TWC’s 25-year, $8.35 billion deal with the Dodgers — a deal that leaves TWC on the hook for roughly $225 million this season. Industry estimates suggest TWC has been losing $100 million per year on SportsNet LA, which prompted layoffs and cost-cutting on both its RSNs last year.

As big as that loss is for Time Warner Cable, though, it really shouldn’t have that much of an impact for TWC’s LA operations. TWC SportsNet collects $4/month from 6.4 million homes in southern California. That’s $307.2 million per year. This year, that channel will pay the Lakers roughly $130 million and the Galaxy about $5 million. If we presume advertising covers the operational costs, that’s a profit of more than $175 million. Surely, that would be enough to help TWC absorb its losses with the Dodgers deal, yes?

Here’s the problem with that — TWC does not own SportsNet LA. The Dodgers own the channel and lease the management rights to TWC. That prevents TWC from fully combining SportsNet LA operations with TWC SportsNet.

If TWC wants to rescue SportsNet LA, that has to change. Fox has some synergy with its two SoCal-area RSNs, Fox Sports West and Prime Ticket; TWC does not, likely because the Dodgers’ ownership of SportsNet LA prevents it. If the Dodgers really want to get the MLB team’s games into more homes, their best option is to let TWC combine their RSNs and show Dodgers games on TWC SportsNet. This would allow TWC to repackage SportsNet LA as SportsNet 2, an overflow channel that would cost, say, $2.40/month — still a lot, but no more than Prime Ticket costs, and much easier for other carriers to swallow.

This would be the perfect year to do that, too. The Lakers will miss the playoffs by a mile, so their season will end on April 13. What will TWC SportsNet have to show until November but an MLS game once a week? Aging Steven Gerrard might be a legend in Liverpool, but he is not exactly must-see TV for the vast majority of SoCal.

The end result would be two RSNs carrying two iconic teams (and one that wants to be) in 6.4 million homes, collecting a combined $6.40/month. That’s $491.5 million in carriage fees. The Dodgers would receive $225 million this year, the Lakers would receive $130 million next season, and the Galaxy would get its $5 million. If advertising covers the operational costs, TWC would have an operation with a $131.5 million profit in 2016, rather than one with a $100 million loss.

And if Time Warner Cable really wants to make this happen, there’s only one man who could help them…

Magic Johnson

Magic Johnson won five championships as a player for the Lakers. He now owns a piece of the Dodgers as part of the Guggenheim Baseball Management group that bought the baseball club for $2 billion four years ago. If anyone can convince the Dodgers and the Lakers that they need to work together to get the most out of their TV deals, it’s Magic.

The only other option for SportsNet LA? A messy CSN Houston-style bankruptcy, which serves nobody and makes a mockery of a legendary announcer’s final season. Given the recent rises in cord-cutting and the escalator clause on the Dodgers’ contract, however, bankruptcy just might be the only way TWC gets out from under this deal — and given the billions in debt that Charter is prepared to heap on the merged cable company, anything that loses $100 million per year seems like a prime candidate to be shut down.

In the meantime, expect this fiasco to get worse before it gets better.

Cable Companies Will Fight Dirty Against FCC To Preserve Set-Top Box Boondoggle

The cable bundle itself is far from the only ripoff in cable television. The average American household spends about $230 a year on cable set-top box rental fees, according to an analysis by Congress released in July. Senators Edward Markey of Massachusetts and Richard Blumenthal of Connecticut, along with the Commerce, Science and Transportation Committee,… Continue Reading

How Broadcast TV Networks Could Reclaim Sports

If you’ve tried to get internet service without TV service from any of the big cable companies — and by big, I mean AT&T, Comcast, Time Warner Cable, and Verizon — in the last few years, chances are they tried to strike this deal with you: keep basic cable with just local channels, and you’ll pay… Continue Reading

A Not-So-Happy New Year For Your Cable Bill

A new calendar year is upon us, and that means your local cable company is introducing new ways to take more money out of your pocket. Starting in January, Time Warner Cable will join a growing list of cable and satellite providers which are charging for sports. For instance, DirecTV has a regional sports channel fee… Continue Reading

Is Comcast Angling To Rescue SportsNet LA?

Yesterday, while everyone else in Los Angeles was talking about Donald Sterling (and generally missing the point), Comcast released the details of its plan to shed enough customers to make its proposed buyout of Time Warner Cable more palatable to regulators. One particular part of this plan, as detailed here in the L.A. Times, caught… Continue Reading

Most Interested Party In Comcast Buyout of Time Warner Cable? Magic Johnson

When Comcast announced this week it was planning to buy out for $45 billion in stock, how much do you think Magic Johnson’s ears perked up? Johnson, of course, won five NBA titles as a player for the Los Angeles Lakers, and he’s currently a partner in Guggenheim Baseball Management, the consortium that owns the Los… Continue Reading

Comcast Buyout of Time Warner Cable Is All About Preserving The Cable Bundle

When Comcast announced it was going to throw $45 billion in stock at Time Warner Cable and create one giant cable company, you could barely contain the groans across the Internet — and with good reason. Here are two of the most hated companies in America attempting to form like Voltron into one giant behemoth of consumer… Continue Reading

Fox Sports 1 Gets Deals Done Under The Wire

Our long national nightmare never really got started, did it? Fox Sports 1 finalized deals with DirecTV, Dish Network, and Time Warner Cable earlier today, the Los Angeles Times has reported. The two satellite companies combined have 34 million customers in the U.S., while Time Warner Cable still has 11.9 million video subscribers, despite losing… Continue Reading

Filed Under: Fox

How Time Warner Cable Is Using Sports To Fleece Los Angeles

If you need a prime example of just how much money regional sports networks can suck from your wallet, look no further than the City of Angels. In the last three years, Los Angeles sports fans have been bombarded with news of their local teams signing TV deals with RSNs worth more than $13.3 billion.… Continue Reading


     

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