DirecTV CEO Mike White is no stranger to taking a stand against rising programming costs, pulling 16 Viacom channels off his service during the summer for 10 days before reaching a carriage deal. Now his company and Dish Network are the lone pay TV providers serving Southern California who don’t have an agreement to carry the LA Lakers’ newly created TV homes: Time Warner Cable SportsNet and Time Warner Cable Deportes. The satellite companies are balking at the $3.95-per-sub-per-month price that TWC reportedly wants. (Verizon, AT&T, Charter and, as of today, Cox Communications have made deals and are carrying the channels.) DirecTV, with about 1.2 million subs in SoCal, also is holding out on making a deal for a third rookie regional sports net, the Pac-12 Networks. It says that costs are out of control. (A fine Sports Business Journal report on the LA mess calculates providers must pony up about $10 per sub per month to carry all the RSNs in town). White was, well, direct during his company’s earnings call yesterday when asked about negotiations. Sounds like the Lakers, who play their fifth game of the season tonight in Utah, won’t be on DirecTV anytime soon:
In terms of Los Angeles, I think it’s another example of how broken this system is. People take the same content, package it up, bid it up for 3 times the national average on a per-game basis and then try and stick it back to the other distributors in the geography. And I think that’s very unfortunate. We have a system of very carefully tracking churn by day to look at kind of what we think our customers will be most interested in. We are continuing to have active discussions about the Lakers network. We hope to have a deal on that content. But all of these new channels that – everybody here wants a new channel and they want to stick it into the bundle, is not right. I mean we are taxing most of our customers who wouldn’t be willing to pay for that content. And I’ve said before, I think the regional sports network structure in the industry is broken. And it is. But I’m probably not going be able to change that overnight. But adding other stuff to the bundle that the average consumer can’t pay for without allowing it to be sold to those that want to pay for it is just not right. So we’ll continue to stand strong for our customers. I’ve got to represent the majority of our customers, not just the few that want to send me an email. And I’m trying very hard to do that in a disciplined way. But, I don’t know that they’re getting more difficult. … I mean and I don’t expect that to change for the foreseeable future. I think we’re going to continue to see very, very tough discussions by all distributors with content providers to try and mitigate these outrageous cost increases that are unaffordable to the average customer.
Stay tuned for when the LA Dodgers’ TV rights are thrown in the mix — they will only add to the asking price of whatever network wins them.
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