Rival pay-TV operators believe Time Warner Cable's (NYSE: TWC) inability to carve affiliate deals for its new Los Angeles Dodgers-based regional sports network (RSN) will have a beneficial chilling affect on the launch of future pricey channels.
"We've been approaching a tipping point in sports programming costs for years and the Los Angeles market has sent a strong message that we've reached it," said Andy Albert, senior VP of content acquisition at Cox Communications, speaking to the Wall Street Journal.
Time Warner Cable "rolled the dice and lost big time," Jimmy Schaeffler, head of consulting firm the Carmel Group, added to the paper.
WSJ also spoke to TWC reps, who defended a $3.84 per subscriber price tag for their channel, SportsNet LA, which is lower, according to the paper, than Fox Sports North ($4.67), Comcast SportsNet Mid-Atlantic ($4.60), New England Sports Network ($4.22) and Comcast SportsNet Philadelphia ($4.20).
"What we brought to the marketplace was not only fairly priced but in some cases lower than what some of these distributors are selling similar products for," Time Warner Cable executive VP Melinda Witmer told WSJ.
TWC paid $8.35 billion to the Dodgers to make SportsNet LA their exclusive RSN home. However, neither DirecTV (NASDAQ: DTV), the No. 2 operator in the region, nor any other rival pay-TV service has licensed the network to date. TWC was asked by the FCC in August to enter binding arbitration, which it did. DirecTV and other local operators have refused that course of action.
With Major League Baseball's regular season over, and the Dodgers post-season games now covered by national networks, the question now is, what will TWC do with SportsNet LA next baseball season? The looming regulatory process for Comcast's (NASDAQ: CMCSA) purchase of TWC, of course, should determine a lot.
- read this Wall Street Journal story (sub. req.)
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Playing the SportsNet LA blame game: Include the fans and the team, too