SBJ/May 5-11, 2014/Media

Sports rights a source of tension at cable show

The cable industry met in Los Angeles for its annual trade show last week amid a glut of threats to its business, from online video and over-the-top programmers to Aereo and cord cutters.

News that AT&T had reached out to buy DirecTV, which would create cable’s biggest potential competitor, hit in the middle of the convention.

These threats lent a new backdrop to the same issues that the industry has been battling for decades: sports rights.

As they have for the past several years, distribution executives complained that sports rights were too high and could cause consumers to dump cable for a competitor over price. Programming executives hit back, saying their prices reflect the value of live sports programming, which is the most important programming genre that is keeping people from cutting the cord.

“A lot of the themes coming out of the conference this year are the same themes from five years ago and 10 years ago,” said Lou Borrelli, a cable pioneer and media investor, who attended the conference. “The cable business has always created a healthy tension between programmers and distributors.”

The conference opened with the sports rights theme, as Los Angeles Mayor Eric Garcetti pleaded for industry executives to find a solution for the carriage battles SportsNet LA is having. A month into the Dodgers’ season and the channel still hasn’t signed any carriage deals beyond Time Warner Cable, which is a partner in the channel. “I’m calling on all participants to resolve this,” Garcetti said during the convention’s welcoming address.

Some convention attendees took note of the aggressive tone ESPN’s John Skipper took in defending his channel, which is the most expensive on cable. In years past, ESPN executives generally stayed quiet during these types of debates. Last week, Skipper addressed the issue head-on.

“Our job is to create value and work with distributors,” Skipper said during a panel session. “ESPN is the product with the most value. Live sports is ascendant. Right now, it’s the most powerful form of programming on the planet.”

BTIG Research media analyst Rich Greenfield also attended the event and said his main takeaway was that technology, more so than sports rights, will be the cable industry’s best way to deal with competitive threats. Greenfield especially was impressed with an application Comcast is developing that would allow its customers to live stream personal videos from their mobile phones back to their in-home TVs. Comcast demonstrated the service at the conference.

“Comcast is building a platform that can integrate almost anything you can imagine,” he said.

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