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Cable Technology Feature Article

July 30, 2014

The L.A. Dodgers TV Situation - The Bad, the Ugly and the Unspeakable

By Bob Wallace, Founder, Fast Forward Thinking LLC

Just when you thought there was a break in fan-unfriendly deadlock between Time Warner (News - Alert) Cable (which aid for the rights to carry L.A. Dodgers channel games) and other potential distributors, sports powerhouse DIRECTV waved it off.

Pressed by California legislators, TWC agreed to enter binding arbitration to address the problem of its not being able to attract other major local TV providers to license the games for which the cable giant forked out over $8 billion, leaving roughly 70% of Dodgers fans in the dark.

The arbitration plan was designed largely to get the number two TV provider in the L.A. market – DIRECTV – to the table. The satellite TV provider said no thanks, continuing to say the price TWC wants too high for distributors, fans and those with no interest in sports who would end up paying more as a result (see statement below). TWC has not reached deals with Verizon, Charter and many smaller providers either.

Breaking Point?

Forget for a minute that the Dodgers are a hot commodity in the nation’s largest TV market. Think of what this ongoing and no end in sight mess really means beyond the woes of powerless Dodgers fans:  that it appears the price for live sports – which has soared for ages, may have hit the ceiling with TWC.

Consider the content crisis at hand here. Beyond TV providers, you now (predictably) have politicians and the FCC (News - Alert) involved, as well as arbitrators – all over live sports licensing deals.

FCC Chairman Tom Wheeler has even sent a letter to TWC Chairman and CEO Rob Marcus, demanding he do something about the predicament soon.

The Dodgers fans are hardly the only ones getting the shaft here. If TWC can cut a deal with another top provider, what happens to the subscribers that want nothing to do with sports programming anyway? ESPN (News - Alert), for example, is one of the priciest channels distributors carry. Higher costs on one side mean higher costs at the consumer end.

Plenty of people who pay TV subscribers, sports fans or not, are already upset with monthly Regional Sports Network (RSN) fees added to their monthly invoice.

From Bad to Worse?

The Dodgers-TWC situation will only worsen. Why? Remember that the two big players here – TWC and DIRECTV – are both in the process of being acquired by other big players – Comcast (News - Alert) and AT&T respectively, with the mega-deals awaiting approvals.

If both get a green light, the customer gets a red one. I’m not aware of any miracle deep wound healing solution that could be brought in to play to ever get the two main feuding partners – Comcast and AT&T – to ever agree on anything programming-wise again.

While we may not reach “TVmageddon” in this scenario, it seems all the parties will do, going forward on content, is agree to disagree. And that’s never really good for the consumer.

To the Edge

With the Dodgers’ regular season already half way gone – and with them poised to make the playoffs in October, it’s hard to argue that content owners/licensees and distributors (oh  and Dodgers fans) haven’t yet reached the abyss.

It’s hard to even predict or hypothetical what happens next unless some provider other than DIRECTV decided to play ball (sorry) with TWC.

Nobody here is getting what they want, least of all the fans. And those traditional pay TV subscribers who are sick and tired of rising prices driven largely by live sports that haven already left for a streamer like Netflix, Amazon, etc., etc. may be ready to make the jump soon.

At this point, the camel’s already getting cortisone injections for its back.

For those interested in DIRECTV’s thinking, here’s the text of their statement issued after they declined binding arbitration over the matter with TWC this week:

"We agree with (California Congressman Brad) 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 (News - Alert) 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."

Given developments to date, it’s impossible for Dodger’s fans who don’t subscribe to TWC to “Keep Calm and Carry On!”

Stay tuned!

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