ATT/DirecTV mergers....Comcast and Time Warner

[caulfield12]

http://consumerist.com/2014/04/29/regional...casttwc-merger/

 

 

THE PHILADELPHIA EXPERIMENT

We’ve written before about the mess here in Philadelphia, where Comcast successfully held a death grip on its local sports network through the “terrestrial loophole,” an antiquated aspect of FCC regulations that said a cable operator didn’t need to share its privately owned stations with others in the area if those stations only went out via terrestrial cables. The FCC closed that loophole several years ago, but CSN Philadelphia is still not available to companies that compete with Comcast in the area.

 

Sources at some of those competitors tell Consumerist it’s because Comcast is demanding an “extortionate” rate — something along the lines of what a cable company would pay to broadcast a major network nationwide — just to air Phillies, Flyers, and Sixers games to customers in the Philadelphia market.

Making matters even worse for those with satellite service, Comcast recently made a deal with the Phillies that ensures that all but around 10 of the team’s 162 games will be broadcast on Comcast-owned stations that are not available to DirecTV or Dish customers.

 

If you need more concrete evidence that Comcast would rather tick off satellite companies than score higher ratings, you need look no further than the current NHL playoffs.

 

NBC is touting that all playoff hockey games will be available on some NBC channel this season, and one of last week’s games between the Flyers and the NY Rangers was slated to appear on CNBC, a station that all DirecTV and Dish subscribers have. But here in Philadelphia, the game was also aired on CSN Philadelphia, which triggered NHL blackout rules, meaning that satellite customers in the area were left staring at a blank screen.

 

There is absolutely no other reason for Comcast to simulcast this game on the smaller regional sports station other than to make sure it remains blacked out for Dish and DirecTV subscribers in the area.

 

So rather than make sure that as many people could see the game as possible, generating more revenue and earning much-needed goodwill, Comcast chose to raise a middle finger to Philadelphia-area residents who dared to not subscribe to Comcast.

The same will likely hold true for tonight’s game, which is available nationally on NBC Sports network, but which will presumably be blacked out for DirecTV and Dish users in the area because it’s also being shown on CSN Philly.

 

HOUSTON, WE HAVE A PROBLEM

 

There is a similar issue going on in Houston, where CSN Houston carries the majority of Rockets and Astros games, but which only about 2-in-5 Houstonians have access to.

 

In spite of sinking ratings because of lack of availability, Comcast has yet to reach a deal with either DirecTV or Dish (or U-Verse and other terrestrial providers in the area), leading Houston Mayor Annise Parker to try to bring all the interested parties together to hopefully come to a resolution.

 

TIME WARNER CABLE: THE UN-ARTFUL DODGER

Comcast’s merger partner is trying to mimic its bigger pal’s tough-guy monopolistic stance with SportsNet L.A., jointly owned by the Dodgers and TWC.

Because TWC is unwilling to budge on the price tag for access to the Dodgers — who currently have the leverage of doing well so far this season — some 70% of people in L.A. have no way of watching most Dodgers game.

 

And much like in Houston, it’s come to the point of mayoral intervention, with Mayor Eric Garcetti (not to be confused with fictional Baltimore politician Tommy Carcetti) recently pleading with TWC to stop being jerks and make a dang deal already.

 

IT ONLY GETS WORSE

A merger between Comcast and Time Warner Cable only gives the combined company more leverage in negotiating with local sports teams — this is especially true with the proposed deal with Charter that would give a merged Comcast/TWC more contiguous coverage in L.A. and much of the East Coast.

 

In NYC, the Mets games are shown on SNY, which is jointly owned by the team, TWC and Comcast. Combined, the cable companies would own one-third of the station. The station is already unavailable to Dish customers in the city. What’s to stop Comcast — especially when it becomes the dominant cable and broadband provider in NYC — to use that ownership stake to raise the price charged to DirecTV, forcing the satellite company to pass the cost on or drop the station?

 

In L.A., Comcast’s adding of the few areas of the city currently held by Charter would bring Dodgers games to more people, but would also mean that the company has less reason to share with DirecTV or Dish, since not as many Angelinos would be up in arms about being unable to watch the games.

 

Comcast has never done anything to show that it has any interest in making sports content available to a wider market. Even its online Olympics coverage was only available to pay-TV subscribers willing to pay for service tiers that included every NBC news and sports channel.

 

A bigger Comcast with more money behind it will only continue to leverage exclusive regional sports deals in order to keep subscribers from cutting the cord and to convince sports fans to stay away from satellite.

[caulfield12]

http://www.latimes.com/entertainment/envel...l#axzz30ImXXqdA

 

 

http://www.latimes.com/entertainment/envel...0425-story.html

 

[cabiness42]

The Sox/Cubs/Bulls/Hawks are also primarily on a CSN station, but apparently the Chicago market isn't having the same issues. I know the teams hold 80% equity in CSN Chicago, is that not the case in Philly and Houston? In any case it was dumb for the teams in those markets to sign deals that gave the network so much leverage in restricting carriage.

 

I would like to see MLB move to a model where all TV rights, both national and local, are controlled directly by MLB. Instead of having local cable sports channels owning each team's rights, you would have locally-produced games and daily/weekly team specific shows running on MLBN in each team's market in place of national programming during certain times, while allowing local broadcast stations (WGN/WCIU) to bid for up to 25% of each team's games.

[Dick Allen]

The Sox/Cubs/Bulls/Hawks are also primarily on a CSN station, but apparently the Chicago market isn't having the same issues. I know the teams hold 80% equity in CSN Chicago, is that not the case in Philly and Houston? In any case it was dumb for the teams in those markets to sign deals that gave the network so much leverage in restricting carriage.

 

I would like to see MLB move to a model where all TV rights, both national and local, are controlled directly by MLB. Instead of having local cable sports channels owning each team's rights, you would have locally-produced games and daily/weekly team specific shows running on MLBN in each team's market in place of national programming during certain times, while allowing local broadcast stations (WGN/WCIU) to bid for up to 25% of each team's games.

I was thinking the fact the teams own most of the station should eliminate the problems they are having in other cities. Now when the Cubs jump ship to their own station, there probably will be a lot of people who won't be able to see their games. I , for one, won't care.

[caulfield12]

The Sox/Cubs/Bulls/Hawks are also primarily on a CSN station, but apparently the Chicago market isn't having the same issues. I know the teams hold 80% equity in CSN Chicago, is that not the case in Philly and Houston? In any case it was dumb for the teams in those markets to sign deals that gave the network so much leverage in restricting carriage.

 

I would like to see MLB move to a model where all TV rights, both national and local, are controlled directly by MLB. Instead of having local cable sports channels owning each team's rights, you would have locally-produced games and daily/weekly team specific shows running on MLBN in each team's market in place of national programming during certain times, while allowing local broadcast stations (WGN/WCIU) to bid for up to 25% of each team's games.

 

Then you're really going to be restricting the top teams' revenues or ability to sell rights at exorbitant rates that might even be against their own interests, eventually (and who's going to be allowed to determine what's a good deal for a team, and what's bad...like the Astros' situation now)...and how can you expect to forge a new owners' consensus on more revenue sharing with RSN's/media/broadcast rights when the cat's already out of the bag with the Yankees, Red Sox, Rangers, Dodgers, etc.?

 

Ayn Rand rant coming here about free and unfettered capitalism...

Edited May 19, 2014 by caulfield12

[cabiness42]

Then you're really going to be restricting the top teams' revenues or ability to sell rights at exorbitant rates that might even be against their own interests, eventually (and who's going to be allowed to determine what's a good deal for a team, and what's bad...like the Astros' situation now)...and how can you expect to forge a new owners' consensus on more revenue sharing with RSN's/media/broadcast rights when the cat's already out of the bag with the Yankees, Red Sox, Rangers, Dodgers, etc.?

 

Ayn Rand rant coming here about free and unfettered capitalism...

 

Yes, but even with some RSN's seemingly losing money and with some RSN's partially owned by teams, you still have to figure that there is a lot of profit going to RSN's from MLB. Keeping the TV rights in-house should improve MLB's bottom line. Yes, the highest-end teams may not get as much, but if MLB is making more money as a whole, that should be good for the sport, not to mention more control about getting games on where viewers want to see them.

[caulfield12]

Yes, but even with some RSN's seemingly losing money and with some RSN's partially owned by teams, you still have to figure that there is a lot of profit going to RSN's from MLB. Keeping the TV rights in-house should improve MLB's bottom line. Yes, the highest-end teams may not get as much, but if MLB is making more money as a whole, that should be good for the sport, not to mention more control about getting games on where viewers want to see them.

 

 

I think the part about losing money or not being profitable would get a lot more attention were it not the Astros, who have been bad for quite some time now.

 

How many times in the last two years have they had 0.0 shares for their games?

 

Plus, the Rockets haven't exactly been a perennial playoff-contending team, either. They have more followers here in China to this day just because of Jeremy Lin and the fact that Yao Ming and T-Mac played together back in the glory days of Yao's career, when every single game was broadcast live here in China, not unlike Dice-K/Darvish/Tanaka starts in Japan.

[cabiness42]

I just think that MLB has the opportunity to both increase revenues and make fans happier.

 

The current process is:

1) MLB team sells TV rights to local RSN

2) Local RSN sells channel that shows games to satellite/cable providers. In nearly all cases, MLB team has no control over this process and thus no control over which people are getting the games on TV

3) Both RSN and satellite/cable providers sell advertising for commercials during games.

 

Now, if MLB just set up what amounts to 27 regional MLB Networks, they can control the entire process and make the money that the RSN's are currently making off their product. In addition, it generates a wider demand for MLBN which increases distribution.

 

Why couldn't this work?

[caulfield12]

The market is already "self correcting" because of the irrational exuberance of some of the early deals is meeting financial reality/corporate profit margins in a way that's already risking the deterioration of some fanbases...like the Dodgers' current situation.

 

 

 

 

 

[Jake]

Yeah, LA is still reeling from all the money blown on that Puig character

[caulfield12]

A metaphysical question, with a slight twist: If a baseball game is played and no one can see it on TV, does the baseball game really count?

 

The standings say yes. The statistics agree. And yet to the greater Los Angeles area, 70 percent of whom cannot watch the Dodgers in the comfort of their homes, they might as well not exist. The most expensive team money can buy is also the most expensive mistake in the short history of wildly overpriced, patently absurd local-television-rights deals.

 

For an estimated $8.3 billion, Time Warner Cable bought the rights to the Dodgers and created SportsNet LA. Time Warner then suggested to cable and satellite providers that they pay at least $4 a month to carry the channel, a fee they would pass along to subscribers. Every one of them kindly told Time Warner to suck a lemon, and so here we are, with the most popular baseball team in the game's second-biggest media market practically blacking itself out on account of its own efforts to fatten its pockets.

 

And let's not twist this any other way: This is a Dodgers issue and a Time Warner issue, and any effort to spin it otherwise is revisionism. When you have a product like the TV rights to a baseball team, and the value of those TV rights is an ever-moving and nebulous dollar amount, it is incumbent on the parties paying those dollars and receiving those dollars to ensure they will recoup those dollars one way or another.

 

Everybody in the television business agrees: DirecTV, the satellite giant, sets the standard with sports programming – and should continue to do so even after its purchase by AT&T over the weekend. When it agrees to a carriage deal, the rest of the providers fall in line and do the same. For Time Warner to promise the Dodgers an average of more than $330 million a season for the next 25 years without even a soft carriage agreement in place with DirecTV is malpractice, a monster bet on an audience it clearly did not understand.

 

Were cancellation orders flowing in on account of the Dodgers' invisibility, surely DirecTV would reconsider its tack, much as it did when the Lakers launched their own network and fans cried foul at its absence on satellite. More than a quarter of the 2014 baseball season has passed, and DirecTV is firm as ever in its stand, which is frightening for the Dodgers, because it reinforces a troublesome truth: By chasing every last dollar and choosing Time Warner, a direct competitor to DirecTV and other providers, they failed to protect their greatest asset. Not a TV contract but a team.

 

Naturally, the buck-passing is starting, cracks in the unified Dodgers-Time Warner front apparent. Peter Guber, one of the Dodgers' co-owners, recently told the Los Angeles Times: "We sold the rights to a gigantic corporation, it's their job to market the rights and get the distribution. We are not happy that they haven't been able to get the full distribution in our own market that they promised. That's their job. They made the bet."

 

Actually, this bet was two-fold. The Dodgers bet on Time Warner to fulfill its duties, fully aware that an inability to do so would render them mute in a Los Angeles sports scene that thrives on noise. Of course, maybe that's a good thing, consider just how disappointing the …

 

10. Los Angeles Dodgers possess: an endless cauldron of money into which they can dip, filling every obvious problem with a flash of the wallet. It's really quite impressive, and it's what the Dodgers figured their next quarter century would resemble.

 

Sure would be nice if the fans didn't have to drive to Dodger Stadium to see it. Even at 23-22, the Dodgers are a hot ticket. The infusion of excitement from getting to watch them on TV every day – to see the narrative of a season build instead of trying to piece one together from now-and-again trips to the stadium – matters to the modern consumer. There's a reason local-TV deals have fetched billions. Because in those cases, demand dictated the price of the sale.

The tail wagged the dog with the Dodgers, and maybe the AT&T-DirecTV merger will force the issue instead of seeing the Dodgers go on the public-relations offensive while DirecTV continues to make the same reasonable point: Why charge everyone $4 for a channel not all of them watch?

 

It's a salient point, one that strikes right at the heart of the TV-rights system that continues to move toward a-la-carte programming. If you want SportsNet LA, you should have it. If not, you shouldn't. Simple enough. And yet because past TV deals have forced consumers into buying products they don't want, the Dodgers want to argue precedent holds.

 

So it shall, from now until whenever the lawyers say the Los Angeles Invisibles can return to television and remind people what they were missing in the first place.

 

 

http://sports.yahoo.com/news/10-degrees--d...-053835872.html

Edited May 20, 2014 by caulfield12