UPDATED: DirecTV (NASDAQ: DTV) appears to have no interest in entering a binding arbitration process with Time Warner Cable over a lengthy carriage impasse that has kept 70 percent of the L.A. market blacked out from Dodgers games this season.
The DirecTV statement: "We agree with Congressman Sherman that any loyal Dodger fans deserve the opportunity to see games, yet not at the expense of the millions of other AT&T U-verse, Charter Communications, Cox Communications, DIRECTV, Dish Network, Mediacom, Suddenlink Communications, Verizon FiOS and other families who have little or no interest in paying for Time Warner Cable's excess. Rather than force everyone to bail Time Warner Cable out, the simplest solution is to enable only those who want to pay to see the remaining Dodgers games to do so at the price Time Warner Cable wants to set."
REPORTED EARLIER: Time Warner Cable (NYSE: TWC) says it's willing to enter a binding arbitration process to end the negotiating impasse over its recently launched regional sports network, SportsNet LA, after a group of six Southern California lawmakers urged the FCC to intervene in the matter.
"We are willing to enter into binding arbitration with DirecTV, and we appreciate the congressman's concern for Dodger fans," Time Warner Cable said in a statement. "We prefer to reach agreements through private business negotiations, but given the current circumstance, we are willing to agree to binding arbitration and to allow DirecTV customers to watch the Dodgers games while the arbitration is concluded."
TWC launched SportsNet LA in March as the exclusive local TV home to Major League Baseball's Los Angeles Dodgers. The cable company has been reportedly asking carriage fees in excess of $4 per subscriber, with no TV Everywhere rights (MLB restricts the distribution of those to regional sports nets).
DirecTV, the Southern California region's No. 2 pay-TV provider by a narrow margin, has balked at that price. So have other carriers operating in the area, including Verizon (NYSE: VZ) and Charter Communications (NASDAQ: CHTR).
As a result, 70 percent of the Southern California TV market has been blacked out from games not picked up for national coverage by ESPN or Fox this season, one in which the Dodgers are currently leading the National League West and look poised for another serious pennant drive.
Meanwhile, TWC--which had struggled to get a RSN built around the L.A. Lakers off the ground just two years ago--is on the hook for $8.35 billion owed to the Dodgers over 25 years.
TWC's capitulation comes after six Southern California-area Democratic lawmakers, led by Rep. Brad Sherman (D-Sherman Oaks) sent a letter to the Federal Communications Commission, DirecTV chief executive Michael White and TWC chief executive Rob Marcus, strongly suggesting an arbitration take place.
The FCC recently did intervene with binding arbitration in a long-running RSN dispute in Pittsburgh, ruling in favor of pay-TV operator Armstrong Utilities in its impasse with DirecTV Group's Root Sports Pittsburgh, home of pro baseball's Pittsburgh Pirates and the National Hockey League's Pittsburgh Penguins.
However, the FCC had the power to offer a binary arbitration process dating back to the all-stock transaction of DirecTV's assets from News Corp. to Liberty Media in 2009. "Baseball-style arbitration" was a condition of FCC's approval for that deal.
For more:
- read this Bloomberg story
- read this Los Angeles Times story
Related links:
Calif. lawmakers petition FCC to help end TWC SportsNet LA standoff
Report: TWC-DirecTV deal for Dodgers channel needs Comcast to happen
FCC rules for Armstrong in dispute over regional sports network pricing