Doesn’t sound like DirecTV customers will see Los Angeles Dodgers games on Time Warner Cable‘s SportsNet LA any time soon. The No. 2 cable company’s $8.35B, 25-year commitment for distribution rights was “an unprecedented deal above any rational view of the market” — especially considering baseball’s six-month season — DirecTV CEO Michael White told analysts in a conference call. “We’d still like to carry the Dodgers. We’re still having discussions with Time Warner Cable about it.” But he chafes at the price TWC wants, reportedly $4 per month for each subscriber who receives the channel. “It’s a tax on most customers who wouldn’t pay it if they had a choice.” Last month TWC’s Rob Marcus said that the cable company is adding subs from Dodgers fans who can’t see SportsNet LA on any other pay TV service (except for closely allied Bright House). But White says DirecTV’s churn in LA has been “immaterial ….We’ll continue discussions and hope we can get to a sensible place.” The prices TWC still wants are “so far are beyond what a rational view of the market is.”
Related: LA Mayor Makes Plea For Resolution To Dodgers TV Dispute
White began the call declining to discuss the subject that most interests investors: stories in The Wall Street Journal and elsewhere reporting that he’s been approached by AT&T about a possible deal valued at $40B. “These reports are not based on official sources of information,” he said — a comment that falls far short of an outright denial.
The CEO seemed skeptical about efforts by Dish Network and others to develop an online service that offers some — but not all — pay TV channels for a lower price than the common expanded basic bundle. “We’re all concerned about Millennials and people who can’t afford pay TV,” he says. And “it’s not that difficult” to launch a trimmed service. The big question is what channels programmers would insist that DirecTV offer, and how much that would cost. DirecTV’s research shows there’s “a sharp fall off at $12” a month, he says.
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