& cplSiteName &

Ticket Price Shock for New Dodgers Network

Mari Silbey
2/27/2014
50%
50%

Sports networks are expensive. However, SportsNet LA, the new regional sports network offering around-the-clock coverage of the Los Angeles Dodgers, is more so than most.

USA Today reports that SportsNet LA is asking between $4.50 and $5 per subscriber per month from pay-TV providers that want to carry its content. So far, only Time Warner Cable Inc. (NYSE: TWC) has added the station to its line-up, which is not surprising because the cable company is already subsidizing the network to the tune of $8.35 billion shelled out to the Dodgers over the next 25 years.

TWC has an estimated 2 million customers in Los Angeles, representing about 45% of the TV market. DirecTV Group Inc. (NYSE: DTV), Verizon Communications Inc. (NYSE: VZ)'s FiOS, and AT&T Inc. (NYSE: T)'s U-Verse are among the providers that have balked at paying the price that SportsNet LA is pitching.

Cable companies repeatedly cite sports programming juggernaut ESPN as providing the most valuable content in their bundles for customer retention and acquisition. The results of an operator survey released this week by Beta Networks Corp. listed ESPN as the No. 1 network for perceived value among pay-TV providers for the 14th year in a row. Yet even ESPN charges no more than an estimated $5.40 per subscriber per month, and the network's sports coverage is far more extensive than a single team.

ESPN is also the most expensive content provider to date in cable bundles, although content rights fees are rising in other areas as well. CBS Corp. (NYSE: CBS) CEO Les Moonves has said he expects his company to generate $1 billion from retransmission and affiliate fees by 2017. (See CBS Financials Fuel Aereo Angst)

The price of programming is one big reason why the cable industry is consolidating. Service providers are hoping to wield more power in content negotiations by increasing their distribution footprints. Regional sports networks present a unique challenge, however, because their greatest viewing interest is contained in a very small geographic area.

The question is: How long will pay-TV providers be able to hold out against networks like SportNet LA in the face of fan demand? The answer may be a lot clearer come opening day of the baseball season at the end of March.

— Mari Silbey, special to Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
3/1/2014 | 3:31:03 PM
Re: Overpriced?
This issue will come to a head in April. The Dodgers are a popular brand in LA, especially for content in the summer. The $8.35 billion TWC has paid out to the Dodgers network is proof of that. 

Live sports is one of the last mediums of content that broadcast and cable can count on. Netflix is not streaming baseball games yet. 
albreznick
50%
50%
albreznick,
User Rank: Blogger
2/28/2014 | 4:44:23 PM
Re: Overpriced?
You mean the Dodgers can command higher prices than, say, the KC Royals? Well, yeah, i guess so. But can they command a higher price than the Yankees in New York or the red Sox in Boston? I'm not so sure abut that. As for that loyal Dodgers fan base, don't they all still leave Chevez Ravine in the 7th inning to avoid the traffic going home?e  
DOShea
50%
50%
DOShea,
User Rank: Blogger
2/27/2014 | 4:47:01 PM
Re: Overpriced?
Not that this legitimizes the asking price in any way, but the Dodgers will field one of the best teams in baseball this year, and have one of the largest, most rabid regional fan bases every year. If they're going to ask for a big fee, now is the time to do it.

 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/27/2014 | 3:46:45 PM
Overpriced?
Something having to do with professional sports is overpriced? I'm shocked, shocked I say!
Featured Video
From The Founder
Light Reading founder Steve Saunders talks with VMware's Shekar Ayyar, who explains why cloud architectures are becoming more distributed, what that means for workloads, and why telcos can still be significant cloud services players.
Flash Poll
Upcoming Live Events
May 14-16, 2018, Austin Convention Center
May 14, 2018, Brazos Hall, Austin, Texas
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
I'm Back for the Future of Communications
Phil Harvey, US News Editor, 4/20/2018
US Investigating Huawei for Sanctions Violations – Report
Phil Harvey, US News Editor, 4/25/2018
AT&T Exec Dishes That He's Not So Hot on Rival-Partner Comcast
Mari Silbey, Senior Editor, Cable/Video, 4/19/2018
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed
Partner Perspectives - content from our sponsors
What's in the Box?
By Huawei
Beginning With the End In Mind
By Kevin Taylor, for Huawei
All Partner Perspectives