As the carriage impasse over Time Warner Cable's (NYSE: TWC) new regional sports network home for the L.A. Dodgers enters its sixth month, speculation is emerging that the standoff could negatively impact the proposed merger between TWC and Comcast (NASDAQ: CMCSA).
Bloomberg reports that with TWC demanding $3.84 per subscriber from rival carriers to license SportsNet LA--more than twice what other RSNs are priced at, according to SNL Kagan--regulators could be concerned about the possible implications of having the superior leverage of Comcast assume control of the negotiations.
"With federal regulators now taking an interest in why 70 percent of local pay-TV customers have been without access to Dodgers games for months, the standoff could trip up Comcast Corp. as it tries to complete its acquisition of Time Warner Cable," Bloomberg's Mike Shields writes. "Concern that the combined company's heft would be wielded in a way that hurts competitors could lead regulators to block or impose conditions on the $42.5 billion merger."
Added Ross Lieberman, senior VP of government affairs at the American Cable Association: "Comcast will have a new incentive to charge its rivals more for regional sports as it gains subscribers in more areas and sees more opportunities for revenue."
Conversely, TVPredictions followed up on the ultimatum given by Federal Communications Commission chairman Tom Wheeler to Rob Marcus in July, ordering the TWC chief executive to come up with a plan to resolve the dispute in the next 10 days.
But 20 days after Wheeler's missive was sent, TVPredictions reports, the FCC would offer no comment as to whether Marcus and TWC even responded to the demand.
For its part, TWC has offered to enter binding arbitration, which was the key mandate put forward by the FCC, as well as a group of Southern California lawmakers who have called on the regulatory body to do something about the stalemate.
So far, the L.A. region's No. 2 pay-TV provider, DirecTV (NASDAQ: DTV), has resisted a commitment to such binding arbitration.
For more:
- read this Bloomberg story
- read this TVPredictions story
Related links:
Playing the SportsNet LA blame game: Include the fans and the team, too
DirecTV rejects lawmakers' SportsNet LA appeal: Wants mediation, not arbitration
SoCal lawmaker continues to sell Dodgers channel arbitration to DirecTV