Rising Cost Of Sports Programming Leading To Growing Dissent In Media Business

Dissent is "growing within the media business over the rising cost of sports programming," according to Schenchner & Peers of the WALL STREET JOURNAL. Liberty Media President & CEO Greg Maffei yesterday "described the rising cost of ESPN as a 'tax on every American household.'" He said that the cost increases "create an opportunity for alternative TV offerings that could undercut the way cable channels are packaged -- as bundles of different programming." Maffei asked, "What happens to the bundle of cable if you keep pushing (the price) higher and higher?" Some execs say that the "pricey sports channels like ESPN might be better off on a separate tier of service, to make TV more affordable." If not, rising rights fees from sports like the NFL will "ripple down the chain to consumers' monthly bills at an unsustainable clip." Viacom CEO Philippe Dauman also "singled out ESPN as a driver of rising subscription costs ... noting that ESPN 'alone as a network in many systems is double the cost of all our networks combined.'" Viacom "owns channels including MTV and Nickelodeon." ESPN "defended the value of its programming." DirecTV Exec VP/Content Strategy & Development Derek Chang said, "You're in a position where many people may not care about sports content, and their bill goes up anyway" (WALL STREET JOURNAL, 12/6).

MEDIA WAR: In L.A., Diane Pucin writes under the header, "In The L.A. Sports Viewing Market, A Clash Of Media Titans." There is a "high-stakes fight being waged locally between a couple of heavyweights." Fox is battling Time Warner and the winner "will take home a big trophy: the majority of sports viewers in the nation's second-biggest media market." Time Warner has "already stolen the Lakers away from Fox Sports West in a 20-year, $3-billion deal that begins in the 2012-13 season." The net also has "acquired the rights to the Los Angeles Galaxy for $55 million over 10 years." But there is "one more jewel of sports programming still out there: the Dodgers, who happen to be Fox's most valuable television asset." Time Warner has "made clear that it wants to add more sports programming and that the Dodgers are at the top of the company's wish list." Fox' RSNs in Southern California "carry the Angels, Clippers, Kings and Ducks, but it is the Dodgers programming that is vital to its future." Former CBS Sports president and media consultant Neal Pilson: "If you lose the Lakers and Dodgers, that's a serious change to your business model. Those are two premier sports properties in the L.A. market." AEG President & CEO Tim Leiweke, whose company owns the NHL Kings, said that "talks have begun about those broadcast rights even though four years remain on that team's contract with Fox." Media experts said that Time Warner's "willingness to pay $55 million for soccer broadcasts, which don't even match the modest ratings of pro hockey, shows the value of sports to networks searching for around-the-clock programming to warrant their subscriber fees" (L.A. TIMES, 12/6). Meanwhile, the ORANGE COUNTY REGISTER's Kevin Ding last week examined the impact the Lakers' deal with Time Warner could have within the new CBA and wrote, "Let's pause and appreciate how much money one club, starting next season, will get per year all to itself just from local TV" (ORANGE COUNTY REGISTER, 11/30).

SHOWTIME: CABLEFAX DAILY writes viewers should not "look for a Time Warner Cable Sports net anytime soon." Time Warner Cable CFO Irene Esteves said yesterday, "We're not in the content business. We don't particularly want to be in the content business." She described Time Warner's "deal to launch a Lakers RSN as a way to mitigate costs when it comes to expensive, single-team RSNs." Esteves: "We're taking this opportunity to cut out the middle-man and manage our own programming costs" (CABLEFAXDAILY.com, 12/6). Discussing the Lakers deal, Esteves said the company is "really dealing with the programming costs" and "incredible" sports increases, along with broadcast retransmission fees. She said, "We're getting hit on all sides" (HOLLYWOODREPORTER.com, 12/6).