SBJ/May 28-June 3, 2012/Media

Talk now, action later on deals for TWC RSN

Editor's note: This story is revised from the print edition.

Don’t expect Time Warner Cable to cut significant carriage deals for its planned Los Angeles RSNs until November, at the earliest.

While negotiations have officially started for Time Warner Cable SportsNet and Time Warner Cable Deportes, distributors who attended last week’s Cable Show in Boston consistently said that they don’t expect talks to heat up until just before the NBA Lakers’ season opens in the fall.

Distributors said not to expect talks to warm up until the Lakers are back in action in the fall.
Photo by: NBAE / GETTY IMAGES
Because they are actively negotiating with Time Warner Cable for the channels, the distributors did not want to speak on the record. It is standard practice in the cable industry to wait until just before or just after a channel’s launch to cut a carriage deal.

The channels — one in English and one in Spanish — are scheduled to launch Oct. 1, but their critical programming starts about a month later, when the Lakers’ regular season begins. That is the date distributors have circled.

That means a long, hot summer of bickering over a proposed license fee that distributors already are complaining is among the highest of all regional sports networks. In its initial offer sheet to distributors, Time Warner Cable has proposed a tiered system, where cable systems within the Los Angeles DMA pay $3.95 per subscriber per month, according to a source who has seen the offer sheet. Cable systems in outlying areas — north to Fresno, south to San Diego, east to the Arizona border — would pay $1.25.

Averaging all of the zones together, the license fee would be more than $3 per subscriber per month.

According to figures from SNL Kagan, five RSNs cost more than $3, including Comcast SportsNet Mid-Atlantic ($4.02) and New England Sports Network ($3.56).

The channels will launch with rights to the Lakers, which had been on FS West. They’ll also have MLS Galaxy games, which were on FS West and Prime Ticket last year and have been on a local over-the-air station this year.

Last year’s move to pick up the Lakers’ rights was a bold stroke by Time Warner Cable and served to announce its interest in bidding for sports rights in markets where it operates cable systems. Time Warner Cable has around 2 million subscribers in Southern California, which accounts for 40 percent of the pay-TV market in the Los Angeles DMA. The channels will be carried in those homes at launch.
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