SBD/February 15, 2013/Media

DirecTV To Expand RSN Surcharge In Certain Markets This Spring To Include All Customers

DirecTV Chair, President & CEO Mike White Thursday said that the company will expand its RSN surcharge "in the spring to include existing customers,” according to Mike Farrell of MULTICHANNEL NEWS. DirecTV “began implementing a $3 monthly surcharge in August for regional sports networks in markets that had multiple RSNs," including N.Y., and L.A., but "only to new customers.” Verizon FiOS TV began “implementing a $2.42 monthly charge for RSNs in California, Texas and Florida in February, with plans to expand to its remaining states in March.” and analysts have “expected other distributors to follow suit to help offset the high costs of RSNs, but so far no cable operators have taken the bait.” DirecTV has “balked at carrying the Pac-12 regional sports networks and CSN Houston, and still does not carry CSN Northwest.” It also was one of the last distributors to “sign on to Time Warner Cable Sportsnet and Time Warner Cable Deportes in Los Angeles” (MULTICHANNEL.com, 2/14). White during the company's Q4 earnings conference call Thursday "slammed rising sports rights fees." He said, "The sports business model is broken." He added that if DirecTV was "to carry sports programming in the few markets that are 'completely out of control' and 'unaffordable for the average consumer,' the only solution is through some kind of surcharge." White said that the surcharge does not "even come close to covering the total costs for sports in those markets" (CABLEFAX DAILY, 2/15).

SPORTS CHANNELS ON A PAY TIER? Comcast CEO Brian Roberts on Wednesday said the idea of placing sports channels on a premium pay tier on cable providers “is a conversation that is going to be had, and we have to be a constructive participant.” Roberts said, “It’s time that we’re part of that dialogue and try to help come up with solutions that are good for the various stakeholders, and we shouldn’t shy away from that.” He added, "Costs are rising and not everybody wants that to happen, and yet we have to create more value to justify those cost increases. So that’s strategy we’ve been employing” (“Squawk Box,” CNBC, 2/13).
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