Q. I’ve been reading that there will be refunds for our sports channel fees because there’s no sports on now with the Coronavirus. What is the status of that? When will we get our refunds? — Mark, Evanston, Illinois.
Mark, the answer is probably never. Let me explain.
National sports channels, such as ESPN and FS1, and regional sports channels, such as NESN, the Yes Network, and the AT&T-branded networks, are unable to offer live sporting events now due to the Coronavirus outbreak. This, of course, is the main reason why viewers watch them, and why cable and satellite operators pay millions of dollars to carry them.
The channels’ inability to deliver what they promised has triggered speculation that cable and satellite TV operators will refuse to continue paying the same carriage rates. And the pay TV ops would then in turn pass the savings along to their customers in refunds.
The New York Post has reported that Dish has told Disney, which owns ESPN, that it plans in the coming days to withhold payments for the sports channel.
“Charlie Ergen is trying to get out of the ESPN contract by claiming force majeure,” the newspaper writes, referring to a contract clause that would end the fees if there is an “extraordinary event.”
It’s unclear if other pay TV operators would follow suit because some of them actually own sports channels themselves. AT&T, which owns DIRECTV and U-verse, also owns those regional sports channels, and Comcast has regional nets as well. Charter doesn’t own a sports channel, but it manages the SportsNet LA channel.
The three biggest pay TV operators don’t want to set a precedent where pay TV services can decide when to pay sports channels.
But even if Dish refuses to pay Disney, there’s a big gap between Dish saying it won’t pay and not actually paying eventually. And there’s a bigger gap between Dish saying it won’t pay and any Dish subscriber actually getting a refund.
The dispute would quickly go to the courts where the outcome might not be known for months or longer. Consequently, Dish would not know if it could keep the Disney payments for some time. So it’s unlikely that it would start handing out ESPN refunds because it might have to pay Disney after all.
Mark, I don’t see Dish or any of the other top cable and satellite operators offering sports channel refunds to their entire subscriber base.
Last point: Why wouldn’t ESPN, and other sports channels, simply agree to reduce their carriage fees under the circumstances?
They can’t because they must pay the sports leagues for the rights to carry the games. And the leagues, which are hurting financially now like everyone else, have no interest in doing that.
Of course, the sports channels could sue the leagues, but that would just tie up this situation indefinitely.
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— Phillip Swann