SBD/February 15, 2011/Media

Lakers Ink 20-Year Rights Deal With Time Warner Cable That Could Be Worth $3B

TWC will create English and Spanish language RSNs to cover the Lakers
Time Warner Cable signed a 20-year rights deal with the Lakers that will lead to the creation of two new regional sports networks in the L.A. market next year. Time Warner Cable will fully own the two new RSNs -- one in English and one in Spanish. The RSNs will have the rights to pre-, regular- and postseason Lakers games starting with the '12-13 season. Fox, which already operates FS West and Prime Ticket in L.A., had been negotiating to keep the Lakers’ rights on FS West, and sources familiar with the Lakers' proposal to Fox indicated that the team was looking for a $3B, 20-year deal, which averages out to $150M per year. The Lakers' exclusive negotiating window with FSN, which carries Lakers games on FS West, lapsed at the end of December; the club's exclusive negotiating window with local broadcaster KCAL-CBS, which carries 41 games, ceased at the end of September. FSN VP/PR Chris Bellitti released a statement yesterday saying, "Fox made an offer to the Lakers that would have paid them one of the highest local TV rights fees in professional sports. We did not believe that going higher was in the best interest of our business or pay TV customers in Los Angeles, who will bear the cost of this deal for years to come." Because of the popularity of the Lakers, many of their games are picked up by national broadcasters. ESPN has the right to carry up to 10 Lakers games on its net and six on ABC, and it generally has used most of those over the past several years. TNT can show the Lakers up to nine times during the regular season (John Ourand, THE DAILY). In L.A., Joe Flint cites sources as saying that under their deal with FS West, the Lakers were "getting about $30 million a year in rights fees." A KCAL spokesperson said that the loss of the Lakers "will not stop the channel from making 'local sports a big part of the station's identity'" (L.A. TIMES, 2/15).  

CHANGING CHANNELS : Lakers Senior VP/Business Operations Tim Harris said that the team "had been engaging in conversations with KCAL and Fox while remaining open to other possibilities." Harris: "When we had our first discussions with the Time Warner folks, the thing that really kept driving us forward, there was this synergy, and the best way I could describe it is ... more Lakers." Time Warner Cable Exec VP & Chief Programming Officer Melinda Witmer said, "This was a quick romance." The dedicated Spanish-language RSN is a "first in U.S. broadcasting, a development that Lakers owner Jerry Buss said he was 'particularly proud' of" (VARIETY.com, 2/14). MULTICHANNEL NEWS' Umstead & Reynolds wrote the deal is a "major regional sports network coup" for TWC. Lakers home games have been airing on cable since '85, while KCAL "has been televising the club's road games since the 1970s" (MULTICHANNEL.com, 2/14). Witmer said, "Our experience is that Time Warner has a large footprint and the bulk of basketball fans through the country get their sports through a cable regional sports network" (L.A. DAILY NEWS, 2/15).

MORE THAN JUST LAKERS CONTENT: TWC execs said they will be scouting other content for the channels eventually. Witmer said, "We're not in conversations with anybody right now. We'll be looking at all manner of sports that will be of interest to consumers in this marketplace, as well as other content and some lifestyle programming." The Dodgers' local rights deal ends in '13; the Angels' deal runs another six or seven years (Ourand). ESPN L.A.'s Dave McMenamin noted TWC's RSNs "will feature an expansive amount of Lakers content, but will not exclusively broadcast programming related to the purple and gold like" the Yankees' YES Network. Witmer said that the channels "will broadcast a nightly Lakers news magazine show as well as develop and create both original and historical Lakers programming." The nets will be available to "all satellite, cable and telco distributors in the Lakers' territory, which includes all of Southern California, Nevada and Hawaii" (ESPNLA.com, 2/14).

NEW OPTION FOR DODGERS: The L.A. TIMES' Flint reported next on TWC's "wish list could be the Dodgers." According to court documents in his ongoing divorce trial, Dodgers Owner Frank McCourt had "intended to launch cable channels dubbed 'DTV: Dodger Television' in English and Spanish." Dodgers VP/PR & Broadcasting Josh Rawitch "declined to comment on how Monday's news might affect those plans" (L.A. TIMES, 2/15). Two sports industry consultants said that "what the Dodgers might have lost in financial upside could be somewhat mitigated with the newfound leverage of more sports channels in town." In L.A., Bill Shaikin noted McCourt "still could pursue DTV, although local cable and satellite operators might balk at adding a Dodgers-themed channel, since subscribers might balk at paying for DTV, the Lakers channels," FS West and FS Prime Ticket. But the Lakers "provided McCourt with additional leverage." Until yesterday, the Dodgers could say to Fox, "If you don't offer us enough money to renew our deal, we'll start our own channel." Now the Dodgers can say to Fox, "If you don't offer us enough, we can start our own channel or move our games to the Lakers channel" (LATIMES.com, 2/14).    
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