SBD/January 28, 2013/Media

Verizon Joins DirecTV In Charging Subscribers Surcharge For RSNs

With sports channel costs "soaring," Verizon's FiOS TV service "says it will surcharge almost five million customers $2.42 a month for regional sports networks," according to Bob Fernandez of the PHILADELPHIA INQUIRER. Verizon last week "launched its first non-sports cable-TV package." DirecTV, the nation's "second-largest pay-TV operator after Comcast Corp., also is implementing sports-related surcharges." The actions come "amid a national debate over sports entertainment, which is now estimated to account for half the programming costs in the typical cable- and satellite-TV bill." DirecTV now "levies a $3 surcharge for new customers and next month will add a $2 surcharge for existing customers in TV markets with more than one regional sports network." DirecTV PR Dir Robert Mercer said that the surcharges apply "to about 20 percent of DirecTV customers" (, 1/25). CABLEFAX DAILY notes Verizon will start applying its fee in February in certain markets and will "roll it out to other regions" in March and April. Verizon's fee will "apply in all markets (all but one market has multiple RSNs), with new customers and those on month-to-month contracts impacted initially" (CABLEFAX DAILY, 1/28).

EVERYONE PAYS: In N.Y., Brian Stelter in a front-page piece noted the "eye-popping price tags have restarted debate about a topic near and dear to sports fans, fairness: many TV customers never watch the mightily expensive channels at all, yet almost all must pay." Stelter wrote just about "everybody in the business agrees that the overall costs are outrageous," but nobody has "an easy solution." For the most part, "all of these networks are requirements, not options for cable customers." Industry critics said that if "anything ever causes distributors to try more of an 'à la carte' model of pricing, it’s sports programming." Some distributor execs "privately agree." They "talk of a bubble caused by the high license fees commanded by sports leagues, and demanded by the networks that pay those fees." They said that they "want to keep costs down, and some have even threatened to drop low-rated channels from their lineups." But they "continue to agree to pay more and more for sports." Bevilacqua Helfant Ventures co-Founder & CEO Chris Bevilacqua said, "If consumers were that upset by the costs, they'd be dropping their cable subscriptions in droves" (N.Y. TIMES, 1/26).
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