SBD/January 30, 2013/Media

Time Warner Cable Increasing Rates For All TV Services In Wake Of Dodgers Deal

Cox Communications called new RSNs like the Dodgers' net a "major problem"
Just days after Time Warner Cable agreed to a 25-year, nearly $8B deal with the Dodgers for a new RSN, the company is "jacking up rates for nearly all its other TV services," according to David Lazarus of the L.A. TIMES. It is "tempting to conclude that Time Warner is padding its pockets in light of its hugely expensive deal to create SportsNet LA." TWC "cut a similar deal" with the Lakers for TWC SportsNet, which costs other cable and satellite companies "about $4 a month." The added cost typically is "passed along to customers of those companies." Analysts expect that the added cost to cable and satellite viewers for the Dodgers channel will "be in the vicinity of $5 a month." But TWC is by "no means alone in reaching deeper in customers' pockets" (L.A. TIMES, 1/30). Cox Communications said the "trend" of pro sports teams creating their own RSNs is a "major problem." The company in a statement said, "At any point in time, less than 5 percent of our customers are watching the games appearing on regional sports networks. The trend of teams extracting themselves from an existing RSN and starting their own channels, and the requirement that distributors continue to pay fees that impact most customers, has become a major problem." Cox was not "commenting on any specific net" (CABLEFAX DAILY, 1/30). 

WHY SO LONG? In L.A., Steve Dilbeck asked of TWC's 25-year deal with the Dodgers, "Why would either party want a deal so long?" There "seems genuine risk for both." The way things are "changing in the broadcast and cable industry, who knows how it will hold up 20 years from now or even 10 years?" In 15 years, it may "look like a bargain" for TWC, or "a gigantic rip off." The Dodgers "could be marveling at their tremendous foresight or wondering what they were thinking." Dilbeck: "Is there an opt-out at some point in the contract for either, or a point where terms can be renegotiated? No safety net? Just more that is unknown" (LATIMES.com, 1/29).
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