Q. It’s 2020 and it looks like the Dodgers won’t be on DIRECTV yet again this season. Isn’t there anything that can be done about this?! Why won’t Charter just lower the fees so every TV company would carry SportsNet LA? It doesn’t make any sense to me at all. — Bev, Marina Del Rey, California.
Bev, you’re right. SportsNet LA, the TV home of the Los Angeles Dodgers, is not available on any cable or satellite TV service in the LA market except for Charter Spectrum, which has the management rights to the channel.
The pay TV services say Charter is demanding excessive fees to carry the channel, an allegation denied by the cable operator. But there seems to be no end to the dispute which has now gone on for five years.
So, you ask, if the pay TV ops won’t carry it, why doesn’t Charter just lower its carriage fee so they will? Certainly there has to be a price that would make it worthwhile to DIRECTV, Cox, Dish, U-verse and the live streaming services such as Sling TV, YouTube TV and Hulu Live.
Well, the obvious answer is yes, but lowering the price is a big loser for Charter. The cable operator is paying the Dodgers roughly $334 million a year to manage the channel. Yes, $334 million. So if it lowers the fees, it would take a huge bath. The revenue would never come close to the annual payments it must make to the Dodgers.
Oh, you say, isn’t it taking a bath anyway because no one is carrying the channel?
Yes, but Charter does get some financial benefit by not selling the channel to rival pay TV services. Because Charter is the only major TV provider offering SportsNet LA, many LA residents have subscribed to the cable service largely, if not solely, for that reason. So SportsNet LA has generated added revenue for Charter via extra subscriptions.
We don’t know how many have signed up for Charter to get SportsNet LA — it’s certainly not enough to offset an annual expense of $334 million — but the cable operator has clearly calculated that it’s enough people that it would rather bank on that than lower its carriage fees for the likes of DIRECTV.
It’s all about money, Bev, and how Charter decides to manage a bad situation. (Charter inherited the Dodgers contract as part of its purchase of Time Warner Cable, which actually negotiated the deal.) That may seem not fair, but in baseball and business, fair is not always in play.
— Phillip Swann
Photo credit: Free photo from Pexels.com.