Sports Media from the Distributors' POV

How can distributors craft a business model that brings in profits despite the rising cost of sports channels? Top execs from some of the country’s biggest distributors came together to discuss the issue during the second day of the 2012 Sports Media & Technology conference.

Jeff Weber, president of content and advertising sales for AT&t, said of the deal his company struck with Time Warner Cable for its L.A.-based regional sports networks: “The issue is sports rights and the cost of those rights. In the case of the Lakers, as in the case of all the deals we’re looking at, we take a much harder look at each of the content choices we’re making. Twenty-four months ago, we weren’t making choices. We were negotiating rates in a different way. You really just took the content, but now we are really making a decision on viewership, usage and intensity of viewership to decide whether to take it on or not. In the case of the Lakers, we made a decision that it was in the best interests of our customers.”

Melinda Witmer, chief video and content officer for Time Warner Cable, talked about being on the other side of the regional sports network equation, as an owner:“It has been an illuminating experience in a lot of ways. Not the least of which has been coming to understand better the challenges that other distributors have. We understand cable really well. We understand the way we package really well. But it has given us an opportunity to understand better how others are addressing and serving their consumers. More than anything, we said we know the value assessments we make, and we have to deliver value that Time Warner Cable would justify on the other side or we’ll end up being the only ones distributing the product. It’s why we did what we did in Spanish, and it also allowed us to create a Korean feed for Lakers games.”

Fox President of Distribution Mike Hopkins discussed the loss of the Lakers to Time Warner Cable, and said, “It’s a valuable product. The Lakers have a passionate fan base. Obviously, we’re disappointed to lose them, but at the end of the day, you look at live sports and the passion behind it. We have a lot of teams in a lot of markets. The fact that distributors are valuing content as highly as they are, we think it’s good for us in the long run. We have a lot of teams locked up for a lot of years. We’re looking forward to the future because regional sports and sports in general are the places where you’ll find passion and rabidity. Not every team in every market. But sports is one of those things that consumers pay distributors for.”

Weber also jokingly responded to Witmer when she reminded him that AT&T had also bid on the Lakers’ rights, saying, “Yeah, but we stopped when it got crazy.”